is this possible

dksmm

Bear with me I just want to know our options,

From a house sale we have a 15% deposit for a 250k house should we find one (exchanging tomorrow so technically not sold yet).

I work full time on minimum wage earning about 14.5k, but only been working 3 months. I also get child benefit of 1650 per year.

Hubby earns 30k working full time in the same job for 9+ years. We have two children under 10.

We are in a DMP due to finish Aug 2023 with circa 32k left to pay. We have approached the lenders for f&f settlements but still waiting.

Multiple defaults, in the region of 11 each. Most debt is in husband's name, some joint and a couple in my name. All unsecured, credit cards, loans and overdrafts.

No CCJs/bankruptcy etc, only defaults.

Last default for husband was 2014, last for me was Sep 2015.

All defaults not satisfied. All will drop off by Sep 2020 bar my last one.

Never defaulted on a mortgage or missed a payment, had a mortgage for 7 years til we sold and went into rented.

I am aware we could pay the debts off in full but we would then never have a deposit, so the idea is to reduce the amount owed and clear it if possible or get a mortgage with the DMP in place.

DMP set up Jan 2014, never missed a payment.

Is there any hope of getting a mortgage in the next 6-12 months? With the DMP in place?

DMP currently paid at £395 per month.

the alternative is renting permanently because we could never save for a deposit.

ACG

With a 15% deposit there is a possibility you can get a mortgage now.
Realistically it is unlikely to be at high street rates for the first 2 years but then after that I think high street rates would be a possibility.

k3lvc

As a mere mortal am I missing something given my (non DMP) mortgage adventures

You need a mortgage of £212.5k on a max income of £46k (4.6%) and with outstanding debt of £32k

We were nowhere near those multiples with a 30% deposit and yet still had to clear unsecured debt before mortgage was agreed.

And on my moral high horse you expect to be able to write off some of the debt to be able to afford the mortgage :mad:

erin110

Just to add to above. you should be able to get a mortgage with a 15% deposit however you are going to struggle to borrow how much you need. At the moment I would say lenders will lend around 3 times your joint annual salary. They will also take into consideration the monthly DMP payment which will negatively effect you. Quite a few of the lenders who will consider a DMP and unsatisfied defaults don't accept child benefit as income. I think its very important you speak to a good broker who is experienced in adverse. From my experience you would be best hanging on until the most recent default is at least 2 years old as then you may be able to get 4 times your salaries.

erin110

k3lvc wrote: »

As a mere mortal am I missing something given my (non DMP) mortgage adventures

You need a mortgage of £212.5k on a max income of £46k (4.6%) and with outstanding debt of £32k

We were nowhere near those multiples with a 30% deposit and yet still had to clear unsecured debt before mortgage was agreed.

You are not missing anything. A lot of people are not aware of the criteria around mortgages which is why it is invaluable to have a good broker and to find one before they set their heart on their dream home.

dksmm

In an ideal world I would clear the debt and have a deposit but I just can't do that. I sold our house (exchanging soon) expecting to be able to do both but there's just not enough.

In 6 months time, with the 15% deposit and the £395 per month DMP in place, how much could we borrow? Do they just take off the £400 from the monthly income?

ACG

It is impossible to say in your situation. If you end up with an adverse lender they are unlikely to take into account any tax credits where as if you can get a building society or high street lender to do ti then they would.

As a ballpark work out your income, take off the annual payments for commitments and multiply by 4 to 4.5. But you could do with sitting down with a broker really to go over everything in detail.