Can I get a mortage whilst on a DMP?

tornadobunches

Hello everyone...just popped over from Debt Free Wannabee forum and need some urgent advice as cant seem to find any info at all. Has anyone, or does anybody know if it is still possible to get a mortgage whilst on a Debt Managent Plan? If so do you know who to talk to, who does them etc? Any help would be most grateful..thankyou M

maninthestreet

Are you sure this is wise? If you are having problems with your current level of debt, how are you going to cope with even more debt?

blissfulbabe

Hi TB

Yes, it is possible to get a mortgage on a DMP but there are several things to consider first - you should use a really good IFA who understands the sub-prime market as they will save you thousands of pounds, you will pay a higher rate of interest, ideally you should have a substantial deposit and there is nothing to stop your creditors from putting charging orders on your new property.

In my case (two years into a DMP, with nine to go) I had the chance to buy the house I live in. I was renting it off relatives and they offered it to me with a 40K reduction off the market price, on the understanding that I am no longer in their will. I spent a long time searching for the best deals until my uncle insisted I use their IFA. She got me a deal at 6.25 % with a £450 arrangement fee (this was back in January). The best deal I had been able to find before that was for 6.79% with a 3K arrangement fee - with the same mortgage company.

The CCCS only agreed to give me permission to take out a mortgage when I could show that my relatives were going to sell the house anyway and that if I had to move out my rent would be £820-850 pm but my mortgage payments would be £650 pm.

Also be aware your mortgage payment is only the start of things - you will need life/ house/ contents insurance and to budget for maintenance isssues- the day after we exchanged contracts all the garden fences got blown down! I am currently having to save for a new boiler and new flooring.

I really only agreed to buy the house because I know my relatives worry about me and my situation has caused my aunt untold stress and I feel morally obligated to try ease her worries. However if I hadn't bought the house I would have been forced into bankruptcy as I wouldn't have been able to service my debts, which, in a strange kind of way, I was looking forward to as it would have meant I could start with a clean slate. Now, I spend hours obsessing about interest rates, the house market, whether my creditors will go for CCJs and charging orders, what will happen when I remortgage, will the boiler last etc, etc.

Basically, you pays your money and takes your choice - but owning property is not the be all and end all when it comes to quality of life.