Debt Management Plan and Mortgage

amazing1

Hi there,

My husband and I are currently on a debt management plan (due to a business closure and loss of income several years ago).

We have rented the past 5 years after selling our home a few years ago.

My credit file currently shows as good/excellent. There are two aged defaults due to fall off in the next 6 months.

Only one entry on my credit file indicates I am on a debt management plan. Which could potentially be removed altogether.

My question is- do mortgage companies ask about a Debt Management Plan as standard? Is it something you have to declare?

If any of the debts on the debt management plan are unsettled beyond the 6 years what can those creditors do a) if they have already placed a default that has expired and b) if they never placed a default or the debt appear on the credit file in the first place?

Final question. I have not been a homeowner since 2011. Though before that I had owned property for 15 years. Do I class as a first time buyer?

Thanks

Caz3121

some information from StepChange
http://moneyaware.co.uk/2013/09/can-i-get-a-mortgage-while-on-a-dmp/

How does the size of your deposit compare to the outstanding debt?

amazing1

Hi thanks for that. Depressing reading.

It doesn't quite answer my question though-

If a debt no longer shows on your credit file, does it actually exist in the eyes of a lender?

Say I owed £2K to a creditor who defaulted over 6 years ago. How would that show? Even if I wanted to show I owed it?!

Would making a full and final offer after 6 years make any sense at all?

Mortgage_Mark_2

amazing1 wrote: »

Hi thanks for that. Depressing reading.

It doesn't quite answer my question though-

If a debt no longer shows on your credit file, does it actually exist in the eyes of a lender?

Say I owed £2K to a creditor who defaulted over 6 years ago. How would that show? Even if I wanted to show I owed it?!

Would making a full and final offer after 6 years make any sense at all?

Technically it would 'fall off' your credit file after 6yrs from registration. There is some debate over whether that 6yrs can/does start again if they are in dialogue with you, but strictly speaking it comes off 6yrs from the date of default.

Yes, you have to declare any credit issues on an application - not doing so is FRAUD.

With defaults, your credit file is not 'excellent'. IGNORE your 'credit score' from sites like Experian - it counts for nothing and is visible to you, and you only. Lenders have their own, far more detailed calculation based on your credit history.

If you've owned property before, you are never a 'first time' buyer again, though speak with your mortgage broker as in some instances, some lenders will allow you to access FTB products after a period of time.