Advice needed - remortgage when on dmp

csgohan4

Spending X amount on the house does not always mean you add x to the value to the house.

woofdonkey

I'm not an expert but I have worked for a debt counselling organisation, and it sounds like you are trying to justify spending money you don't have.
Please don't take this personally but I think you need two lists: essential and cosmetic work.

Your house (in particular the kitchen) sounds very similar to the way mine was when I bought my house 5 years ago. "The works required are necessary" - I'm not so sure they all are necessary. If you have debts to pay, you will have to make do.

If you are really honest, do you really need a full size dishwasher if a slim one will fit? Can't you take the door off the cupboard next to the washer for now if it's preventing you using it? New oven knobs - a few pounds? Uneven floor - a few packs of sticky carpet tiles?

It's not nice having a higgledy piggledy kitchen, but neither is losing your home. I have seen some awful cases where people have dug themselves into very deep holes doing things like this. Please be sensible about how you tackle this. You mention temporary vs permanent works. In your case, temporary is absolutely the way to go until you are rid of the DMP.

enthusiasticsaver

bells_on_it wrote: »

We were also thinking that as the house has over 100k equity tied up in it that it would be treated more as an equity release?

We’re not irresponsible borrowers we had essential works required done to the house and unfortunately I lost my job . The DMP was to manage the repayments so we were being honest.

It is not equity release, it is further borrowing so as I say against the terms of your DMP.

enthusiasticsaver

People on DMPs have managed remortgage deals when their current ones expire usually with their existing lender who would not credit check them. Going to another lender would involve searching your credit record and credit scoring when it would be rejected. Whilst I understand you feel these repairs can't wait there is no compulsion on lenders to lend to you if they feel there is a risk of you defaulting. As others have said your DMP creditors might also feel you should be paying them back quicker and paying interest if you can afford to borrow more. Going to an adverse credit broker would most certainly be very expensive. Don't remortgage to pay back the DMP.

My suggestion is that you price the jobs individually and save up to get them done.

bells_on_it

Hi I’m having a little trouble replying

bells_on_it

Thanks for the replies and advice. It’s certaibly given me lots to think about. We definitely don’t want to compound the issue and the dmp was taken out consciously to get out of the cycling of robbing Peter to pay Paul when I was redundant.

I’m not sure I want to go to an adverse credit lender. Going through our mainstream would have meant minimal increase on our mortgage. It will be astronomical through others and make it harder for us.

A mortgage adviser I’ve spoken to in the last few days suggested that I could get a charge order but it would be probably in the 4% region. Also mentioned that it will be 3 years after the dmp before we’ll get anything from mainstream lenders and we could get a charge order to pay back the dmp so we have a better credit file sooner but this to me feels like a bad idea?

enthusiasticsaver

Aren't charging orders taken out by creditors to secure their debt against your home? If they decide to take that route that will mean they effectively turn unsecured debt into secured and presumably have to go to court which adds costs. How did the advisor suggest you get a charge order and to what end?

kingstreet

enthusiasticsaver wrote: »

How did the advisor suggest you get a charge order and to what end?

I suspect this is a second charge/secured loan being suggested.

bells_on_it

The financial advisor suggested it would be a second charge against the house and to be honest I’d rather wait for 3 years after dmp paid off to get credit again than take that route. The cost of it I think would never justify it.

The reason we wanted to remortgage for the works required was due to the increase in mortgage repayments being minimal over the remaining term. To go to an adverse lender for our whole mortgage when we have a good rate would be a very bad idea.

I have spoken to my current provider around my fears of bad rates because of the dmp and the assured me that this wouldn’t be the case we’ve never missed a payment and they base their rates on the LTV so that was reassuring as I’d started to worry we’re made a bad choice by choosing the dmp rather than it being a positive step to ensure we paid back what we owed

enthusiasticsaver

Maybe I am wrong on this but I was under the impression it is against the terms of a DMP that further borrowing is taken out (secured or unsecured?)