DMP and Mortgage

Thisisouryear

Hi, I’m looking for some guidance please. We are on a tight timeframe to attempt to buy a house so need to be looking by Christmas. Both my husband and I have around 1200 each on a credit card and I have a DMP around 6 years old with 7000ish remaining I can either pay credit cards off or make an offer on DMP. Hopefully wilt be trying with Aldermore in December for mortgage. If all fails will be back to renting !!!128534;
Hopefully someone will have some advice on this

ACG

There is not enough information to say what is out there. I think you need to get your credit reports in front of an experienced broker.

There is the potential for high street rates, there is also the potential for some sort of middle ground between aldermore and the high street. It might be a case of keeping the money back and throwing it at a bigger deposit or getting rid of the DMP maybe a starting the clear up of your credit report. But without knowing what affordability and your credit reports look like it is impossible to say what will be available and what is the best route.

I would speak to a broker sooner rather than later and get some guidance.

Mermaid89

First issue will be the affordability checker surely? Why would a lender approve you for a mortgage if you have had to go into debt management to deal with a low debt level?

Thrugelmir

The obvious concern for underwriters is that you have built further debt up. Without the DMP being settled. The DMP is where your priorities need to be. Ultimately it's a reflection of you as a potential borrower and how you manage your personal financial affairs. Profiling is equally important as credit scoring.

Thisisouryear

Thank you for your replies so far.

Our circumstances have changed quite a bit over the years.

The DMP is mine and was dealing with debt accrued while I was single. I met my husband and shortly after had to give up work due to serious illness. Looking back I probably could have taken a different route however it was a very stressful and emotional time.

I am now in full health and am working full time. We have a combined basic income of £49000 and my husband brings in around £600 overtime per month.

We have recently had to move area so staying with family until Christmas hoping to buy at the end of this.

We both have a car in finance at £150 per month and the afore mentioned cc’s these and Husband has a loan with 3 years remaining at £300 per month. It’s been a long haul getting back on our feet and can see a light at the end of the tunnel finally but feel the we are now at a cross roads as to what is next. The other option would be to pay off his loan rent for another 2 years and have a clean slate with larger deposit !!!129327;

Mermaid89

With what information you've volunteered (DMP, Hire purchases plus a loan that still has 36 months left to run) I would honestly not be putting in any kind of mortgage application until my financial liabilities are reduced significantly, if not paid off.

Thrugelmir

Thisisouryear wrote: »

Our circumstances have changed quite a bit over the years.

That's the nature of life. Often a change in circumstances is the cause of why people run into financial difficulty. That results in many years of being trapped in what at times feels like an endless tunnel. Down to individual choice where priorities lie.

Don't give up. You'll get there in the end if you really want to.

Thisisouryear

Thank you onece again, yes I understand that we need to reduce the amount of debt we currently have and are both working very hard to make this happen.

Im really just trying to establish what is the best route to take.

I will certainly take the advice above and see an advisor...

Thisisouryear

After much deliberation we have decided to pay off our credit cards.

I would very much like to apply for a HTB mortgage. Can anyone out there who has a shaky credit history give and personal experiences of this?

John_Jones

Thisisouryear wrote: »

Thank you onece again, yes I understand that we need to reduce the amount of debt we currently have and are both working very hard to make this happen.

Im really just trying to establish what is the best route to take.

I will certainly take the advice above and see an advisor...

The best route to take is to pay all of your debt off today, and then start keeping your credit file spotless.

Time will then be a healer.