Step by Step DMP

Poor_Single_lady

Thank you Ramble. I can afford the mortgage but not the mortgage plus the debt.

I don't have a printer so I guess I would have to write out the letters handwritten.

Will see what happens.

jwil

I wouldn't add your debt to the mortgage. I haven't tried, but I've heard you should be able to move to a new deal with your current provider without a credit check.

Poor_Single_lady

Thank you for advice. I'm so confused about this mortgage thing.

Are we just saying that if you go on a DMP

1) you can't change providers
2) you may struggle to fix it and the bank will put you on the variable rate.

And that's it.

another_casualty

The easiest thing imho, is to stay with the same mortgage provider
It generally costs to change mortgage providers , fixing length for best deals etc . It is less legwork for you also.
You should look at what % rate you are paying . If you stay with the same provider but change the fixed term of your mortgage , you would probably have to pay a fee of some sort . The % rate of your mortgage variable rate may be cheaper when you come off of the fixed term you are on. Eventually the variable rate will begin to creep up on stages. Do not borrow additional money when remortgaging though . I did that a couple of times and got burnt .

When I went on a dmp, it was one of the best things I ever did. The only mistake I made, was not having an emergency fund.
I went with payplan ,who were great. They did all the legwork. The only thing about going with them ( and I assume stepchange etc), is that you have a yearly appraisal and they determine how much you pay the providers over the next 12 months etc. Not sure if you get appraisals if you self managed . Also, when I had a settlement figure in mind , payplan pulled out all the stops for me and took care of it .

Just a few thoughts there:)

Poor_Single_lady

Thank you AnotherCasualty. I quite like the idea of adding some of it to the mortgage and managing the rest- but I also like seeing my mortgage go down. I know a lot of people say don't do it but I can't pretend it doesn't hold appeal.

I'm not sure my salary would be enough to add anything to the mortgage though. It kind of feels like there are limited options at the moment.

sourcrates

Poor_Single_lady wrote: »

Thank you AnotherCasualty. I quite like the idea of adding some of it to the mortgage and managing the rest- but I also like seeing my mortgage go down. I know a lot of people say don't do it but I can't pretend it doesn't hold appeal.

Do not do it, please think this through, yes it does seem like an attractive option, but it is a poisoned chalice, trust me.

All unsecured debt is what is termed non priority, it gets paid, if and when you have the money to service it, you cannot lose your house normally with non priority debt.

What you are proposing is to turn that unimportant, insignificant, non priority debt, into priority, secured debt.

As long as your working and earning the money, you probably will not give it a second thought, but what if your hours are cut at work, or you lose your job, and have to take a lesser paid one, maybe before, you may of been able to maintain your mortgage payments, but this extra debt now means you cannot do so.

It may just be the catalyst that loses you your house, that is exactly what happened to me, you must be very careful here.

another_casualty

Poor_Single_lady wrote: »

Thank you AnotherCasualty. I quite like the idea of adding some of it to the mortgage and managing the rest- but I also like seeing my mortgage go down. I know a lot of people say don't do it but I can't pretend it doesn't hold appeal.

I'm not sure my salary would be enough to add anything to the mortgage though. It kind of feels like there are limited options at the moment.

One thing you must remember here ..affordability !
The potential lenders are pretty much the opposite of the beginning of the 21st century when everything was chucked at you willy nilly.
Now it is like trying to get blood out of a stone , even if you have equity in your home . Plus , apart from being embarrassing at rejection it is very depressing and stressful. Affordability is the new phrase where you get analysed on what you earn and what is left.
As sourcrates has just said..don't do it .

Poor_Single_lady

Sorry I don't explain myself very well. I know 100% what you are saying. I just mean it (adding debt to mortgage) does hold appeal only but I know it's not a good way to go.

Suseka97

I share the view given by Sourcrates and others advising against adding your non-priority debts onto your mortgage - and am glad you see it is not a good option (albeit an appealing one).

Also, as other have said (and I responded to your 'remortgage' query on the DMP support thread) -you may well find that when your fixed term ends, the bank/building society's SVR may be lower than you are paying now. It certainly was in my case and I left it that way for a while, but have now transferred onto a new 3 yr fixed term only because the new deal suits me, I have a good amount for F & Fs if any of my current debts return to being 'enforceable' (currently all remaining are unenforceable) and I want to save surpluses to overpay my mortgage (to reduce the years and interest payments).

So my advice would be for you to just move on with your DMP arrangements and simply stay with your current provider. They are highly unlikely to credit check you, so the DMP and any defaults you may have by then won't affect anything.

Poor_Single_lady

Thank you Suseka. I was grateful for your post on the support thread as well but I didn't want to clog it up with non related posts.
I don't need to change provider or fix it, I just don't want to be evicted or turfed out and just want to make sure I am making the best decisions.
If all we are talking about is going to variable rate and staying with HSBC (which I would have done anyway) then I feel incredibly relived.

As a side note when I got my mortgage HSBC were incredibly helpful and supportive. But I'm scared to tell them about the debt in case it makes them view me as a bad risk and then put me on a high rate or think I won't pay the mortgage. As above I can afford the flat but not the flat and debt.