Debt Management Plan and looking for loan or remortgage

evans_ch

Hello

I do hope you are well.

I am in need of advise and have no idea what the best options are for my self and my family to access a loan or remortgage.

We have been offered a Disability Facilities Grant to build a shower and toilet in out house for my Son. This is great news but we really would like to also make a few changes downs stair to expand for a growing family and to build a extra bed room for our other son who shares his room currently with his brother.

OK so I have been on a DMP for approx 3 year and have paid off £10000 and have approx 14000 to pay

so my credit is not good.

I earn over 30,000 PA

Our house is worth approx 250000
The outstanding is approx 112000
I am looking to access approx £15,000 to 20'000 for the work
I currently pay £500 per month for mortgage
not possible to use the same lending as they no longer do mortgages (Direct Line)

I am looking to find the funds and not over stretch myself this work would really help my family and I thought it may be worth posting here to find out idea from others

this would be easy if I was not on a DMP however this cannot be changed and this is being dealt with.

thanks for your help

kind regards

[Deleted User]

Even without a DMP, I think you would struggle to borrow that amount on your income - certainly via an unsecured loan.

With it, I'd suggest it's impossible.

A remortgage would be the only possible route, but I think that is also highly unlikely.

Does your DMP actually permit further borrowing?

DCFC79

As ZX has pointed out it may not even be possible to get the amount you need, a question creditors would ask is if your taking out extra borrowing why can you not pay us some extra per month.

evans_ch

I believe it is not preferable

I found the below info

Remortgaging your property during a DMP is not easy. However there may be adverse lenders who will consider offering you a mortgage or secured loan.

The criteria for getting a mortgage in your circumstances are relatively strict. You must have been in your Plan for at least 12-24 months. You must not have missed payments during this time and have no additional defaults

DCFC79

As ZX says call your DMP provider.

If they say no way jose then save up.

Shakin_Steve

The problem is these ‘adverse’ lenders, if you can find one willing to lend to you, will impose a very high interest rate. You risk digging yourself a great big hole.
I would use the grant for the shower and toilet, hold fire on the rest until you are more secure. You are fortunate enough to be on top of your debts at the moment, don’t risk upsetting the applecart.

evans_ch

A DMP (Debt Management Plan) is not a legally binding agreement. As such there is no legal reason why you cannot borrow more while you are in the arrangement.

However applying for new credit will be an issue. If you want to borrow a cash loan, take out a car finance agreement or even get a new mobile phone contract you will normally face problems due to your poor credit rating.

There are some so called adverse lenders who may be prepared to lend to you. However they will charge high rates of interest. As such borrowing from them is not recommended

evans_ch

Thanks Shakin Steve

I do tend to agree with you however having the other work completed at the same time as the shower and toilet would save us more than 10'000 pounds worth by the work be it being completed at the same time.

Herzlos

But you can't afford it. It's half your pre-tax salary which is the upper bounds even if you don't have any more debt, but you're not even half way through your DMP.

You're on a Debt Management Plan because you're struggling with your existing debts. You'd have to be insane to think it's a good idea to add more.

Seriously, you're better off saving up for a year or 2 and getting it done then.

evans_ch

I was hoping the equity in the mortgage would swallow a large chunk of the money added to pay back

I have to look at all options and possibilities to see if there is a good solution I am sure you understand my thought process

DCFC79

evans_ch wrote: »

I was hoping the equity in the mortgage would swallow a large chunk of the money added to pay back

I have to look at all options and possibilities to see if there is a good solution I am sure you understand my thought process

Ask Martin Lewis if its a good plan.