DMP, Selling up and mortgages.

recyclingbox

Hi. I posted this in the debt free board but have been advised to post it here as well.

I don't think this is a request for help (yet) but think it may be a cathartic moment as I try to get my head round what is happening. Although any input will be appreciated (!)


18 months ago I lost my well paid job and managed to dodge along on the redundancy payment plus casual work for a year plus wife's salary. However, that dodging along was a lot of credit cards being racked up, minimum payments only etc. and foolishly a couple of payday loans (paid off in full on time) - in June it all finally overwhelmed me/us and we got a DMP in December after 6 months of ostrich like behaviour!
I am now working again, on a third of my previous salary and on a fixed term contract which I expect to get renewed, fingers crossed.
Anyway, we have decided to sell our home (we've accepted an asking price offer on it) which has 100K equity in it which will wipe the DMP (35K) plus gives us enough for a deposit on a smaller home. our mortgage is £1800 per month (we have never ever missed a payment). there is six months left on our current deal although it is portable but in reality I am not sure what that means - this mortgage was taken out 2 months before I was made redundant. we think now we can get a mortgage that would be around £600 p/month and know we can afford it. However, My biggest fear is we will leave our lovely house that we invested so much time and love in and because of the DMP and credit file problems we won't be able to get another mortgage and end up living in rented accommodation for ever! Although we would be debt free - it has always been my aim in life to be rent/mortgage free in retirement.
I am not sure what to do now? rent for 6 months-year to try and straighten out credit? apply for a new mortgage? see if I can port(?) the existing one?
Thanks to anyone who would like to chip in with advice/guidance or general comments!!

kingstreet

You can port the rate from the old mortgage to a new one IF your existing lender is willing to lend to you again. If you are with a high street lender, the chances of a new mortgage immediately after a payment arrangement of some kind is slim.

This is going to be a specialist lender case best placed by a competent independent broker.

You may need some time to elapse between the repayment of the DMP and a new mortgage.

Thrugelmir

Speak to your current lender. Suggest that you have a full proposal drawn up i.e. clearing debts, smaller mortgage etc etc . Explain what happened in detail. Lenders have a duty to assist customers. They are far more likely to help you if everything is totally transparent and you are fully committed to tackling your issues head on. No one is going to judge you.

recyclingbox

Thanks for your replies - the mortgage is with Halifax. I will try the approach you suggest Thrugelmir. I will also talk to the mortgage broker we used, they may have some ideas.

recyclingbox

Thrugelmir wrote: »

Speak to your current lender. Suggest that you have a full proposal drawn up i.e. clearing debts, smaller mortgage etc etc . Explain what happened in detail. Lenders have a duty to assist customers. They are far more likely to help you if everything is totally transparent and you are fully committed to tackling your issues head on. No one is going to judge you.

I did just this Theuglemire. We have got a new much cheaper mortgage with the same lender. I sat down with an advisor in the branch and was fully open and honest and showed him my plans in detail. We have now Paid off our debts and getting on with our lives debt free (except the mortgage!)😀

Thrugelmir

recyclingbox wrote: »

I did just this Theuglemire. We have got a new much cheaper mortgage with the same lender. I sat down with an advisor in the branch and was fully open and honest and showed him my plans in detail. We have now Paid off our debts and getting on with our lives debt free (except the mortgage!)😀

First steps. Don't waste the opportunity. Hope all goes well. :T