Advice

Daisydance

Good morning

I have been on a DMP with SC for 8 years, paying £80 p/m. I have approx. £20000 debt.

My credit rating is now very good. I would like to move house - how will mortgage companies view this debt?

I have inherited some shares so I am in a position to offer a full and final settlement to the 6 companies that I owe money to. How much should I offer with debt this old?

Thank you

sourcrates

Hi,


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Suseka97

I assume all of your debts were defaulted and have since dropped off your credit file - hence the 'very good' rating. So you shouldn't be disadvantaged in terms of the offers or rates available to you. Also should the mortgage company carry out any sort of credit check - again, if all information relating to the debts have been removed they won't find anything negative.

I guess the only thing that might 'flag' in some way is if you have to provide bank statements with incomings and outgoings as I understand most carry out an 'affordability check' these days. So it may depend on how the £80 payment shows, whether its obvious it related to debts of some kind.

Hopefully someone will be along to give you more advice - I've not had personal experience of having my debts fall off yet -but had no problem swopping my mortgage onto a better rate with my current provider recently.

National_Debtline

Hi Daisydance and welcome to MSE,


If you are still in the DMP at the time of applying for a mortgage, this would almost certainly be an expense you would need to declare. If they no longer show on your credit file it would likely be part of an affordability check, but could raise concerns with future lenders. You would really need to speak to an independent mortgage broker to understand the issues with this.


However, if you were to settle them, before applying for a new mortgage, and they no longer show on your credit file, they shouldn't be an issue from a credit or affordability check. When you do full and final offers it is important to do everything in writing, and get the creditor to agree to the terms of the payment, before you send any money. For example, they need to agree not to chase you for the shortfall, not to pass to anyone else who will chase for the shortfall and (if it still shows on your credit file) be marked with a £0 and as partially settled. Once this has been agreed in writing, you could send the settlement. Keep proof of the acceptance and payment for 6 years.


Laura
@natdebtline