Secret debt, DAS and future mortgage(?)

purplechandelier

Hi,
This is my first thread but I have heard that this is a great forum for advice so I am hoping someone can help. My wife got herself over £20,000 in debt over the course of the past few years. I knew nothing about it until we went for a mortgage meeting and it was declined. She entered into a DAS which again she didnt tell me about so I don't know if that was her best option. At her current rate, she will be paying the DAS off until 2026. She also has car finance (in her dad's name) for another 4 years. We have a joint mortgage but had wanted to move to be closer to family. This has obviously had to be put on hold indefinitely. My question is this: would it be worth trying to borrow money from family for a final settlement on the DAS (it would have to be a partial payment as the debt is still aroind £18,000)? Would there still be a chance of getting a mortgage with the partial settlement on her credit file? Would we be better paying off the car finance with borrowed money and increasing monthly payments to the DAS to get it paid off sooner (it would double her monthly payments)? Can anyone tell me likely we would be to be approved for a mortgage with this on her credit file? My rating is excellent. At the moment, I feel very stuck, helpless and desperate to move. For context, we are 30ish, both earn just over £40,000 and have one dependent. 

Yahoo_Mail

Money and friends/relatives do not mix.  Do them a favour and don't ask them to pay off your debt.

Speak to a specialist subprime broker who may be able to get a mortgage offer if you're on a DAS/DMP, but it's very unlikely.

DayDreamerandGeneralWaster

Can you get a mortgage on your salary alone for what you need? 

MovingForwards

I've looked at my lenders criteria, basically last chance saloon of lenders before waiting and they will not accept anyone currently in a DAS. Even if it's cleared it looks like there needs to be upto 3 years gap (it may be minimum of 3 years) since it was settled and 30% deposit.

While people with DAS agreements do post here, they never get much help about them as they are specific to Scotland. I've had a quick look at them and partial settlements are not really done unless the DAS is going to last a long time eg 12 years +.

Is that £40k each or between you? 

The only option may be sole mortgage for you, but as you are financially linked to your wife she may get credit checked and there will be concerns about any potential equity from the current property being due to both of you but only being used by you.

Find a really good independent whole of market mortgage broker, who specialises in adverse credit and see what they say.

Although I'm also 'up here', I used a broker from England and picked him off MSE; I didn't like the way I was spoken to by one up here when I wanted to know what I needed to work towards to get a mortgage. Using the one who posts on this forum enabled me to read loads of his posts and get a feel for how he interacts with people, I wasn't disappointed, nor did I ever feel judged for what had happened financially.

purplechandelier

DayDreamerandGeneralWaster said:

Can you get a mortgage on your salary alone for what you need? 

I don't think so for the area we would be looking. It had crossed my mimd as an option though and might need to be the route we go down, lowering our expectations for our next house.

purplechandelier

MovingForwards said:

Is that £40k each or between you? 

Thank you so much, your reply was really helpful. Just over £40k each, combined of about £85k-ish. 

purplechandelier

Yahoo_Mail said:

Money and friends/relatives do not mix.  Do them a favour and don't ask them to pay off your debt.

Speak to a specialist subprime broker who may be able to get a mortgage offer if you're on a DAS/DMP, but it's very unlikely.

Thank you, appreciate you taking the time to reply. Just want to point out it is not my debt. I understand I will be financially linked in many ways to my wife but despite this, my credit rating is still excellent and I have worked hard to be responsible with money to counteract her frivolity (obviously not knowing the full extent). Her father has lent her money in the past therefore I thought it might be an option to consider if it would be beneficial in the long run.

MovingForwards

Is there any way you can both cut spending / outgoings right down to get that £18k scraped together and clear it in full over the next couple of years; I appreciate there will possibly be charges for the company running it for your wife (I'm assuming she saw an advert for a DAS company rather than doing it via a debt charity).

Once it's cleared, the only sticking point will be waiting the required time before a lender will consider her as a joint applicant. 

I guess you would not consider downsizing, buying in your own name, then upsizing again when your wife would meet lending criteria? That way you can move closer to family, possibly not as close as you want, but probably closer than you are at the moment.

Has your wife now got to grips with spending, discussed the reasons behind it and resolved them? Without that, the risk is it will happen again. Borrowing money seems like an easy way to deal with debt, but all it does is move it from one place to another and doesn't deal with the underlying cause.

Yahoo_Mail

purplechandelier said:

Yahoo_Mail said:

Money and friends/relatives do not mix.  Do them a favour and don't ask them to pay off your debt.

Speak to a specialist subprime broker who may be able to get a mortgage offer if you're on a DAS/DMP, but it's very unlikely.

Thank you, appreciate you taking the time to reply. Just want to point out it is not my debt. I understand I will be financially linked in many ways to my wife but despite this, my credit rating is still excellent and I have worked hard to be responsible with money to counteract her frivolity (obviously not knowing the full extent). Her father has lent her money in the past therefore I thought it might be an option to consider if it would be beneficial in the long run.

She's your wife, her debt is your debt.  If you got divorced, sure, it wouldn't be your liability but a lender is going to assume that all liabilities/debts/bills get split down the middle when you're a couple.  Even if you financially "delinked" yourself from your wife, she would be considered a dependent and I doubt your salary would be enough to support you, your wife and a mortgage unless you're after a very small one.

It's not a nice situation to be in but you need to get it paid off pronto, give it a year or two and then apply for a mortgage (through a broker.)  That's my take on it and it's only advice.  Take from that what you will.

D3xt3r5L4b

Yahoo_Mail said:

purplechandelier said:

Yahoo_Mail said:

Money and friends/relatives do not mix.  Do them a favour and don't ask them to pay off your debt.

Speak to a specialist subprime broker who may be able to get a mortgage offer if you're on a DAS/DMP, but it's very unlikely.

Thank you, appreciate you taking the time to reply. Just want to point out it is not my debt. I understand I will be financially linked in many ways to my wife but despite this, my credit rating is still excellent and I have worked hard to be responsible with money to counteract her frivolity (obviously not knowing the full extent). Her father has lent her money in the past therefore I thought it might be an option to consider if it would be beneficial in the long run.

She's your wife, her debt is your debt.  If you got divorced, sure, it wouldn't be your liability but a lender is going to assume that all liabilities/debts/bills get split down the middle when you're a couple.  Even if you financially "delinked" yourself from your wife, she would be considered a dependent and I doubt your salary would be enough to support you, your wife and a mortgage unless you're after a very small one.

It's not a nice situation to be in but you need to get it paid off pronto, give it a year or two and then apply for a mortgage (through a broker.)  That's my take on it and it's only advice.  Take from that what you will.

The debt belongs to the person whose name it’s under, relationship status is irrelevant here. 

Yahoo_Mail

D3xt3r5L4b said:

Yahoo_Mail said:

purplechandelier said:

Yahoo_Mail said:

Money and friends/relatives do not mix.  Do them a favour and don't ask them to pay off your debt.

Speak to a specialist subprime broker who may be able to get a mortgage offer if you're on a DAS/DMP, but it's very unlikely.

Thank you, appreciate you taking the time to reply. Just want to point out it is not my debt. I understand I will be financially linked in many ways to my wife but despite this, my credit rating is still excellent and I have worked hard to be responsible with money to counteract her frivolity (obviously not knowing the full extent). Her father has lent her money in the past therefore I thought it might be an option to consider if it would be beneficial in the long run.

She's your wife, her debt is your debt.  If you got divorced, sure, it wouldn't be your liability but a lender is going to assume that all liabilities/debts/bills get split down the middle when you're a couple.  Even if you financially "delinked" yourself from your wife, she would be considered a dependent and I doubt your salary would be enough to support you, your wife and a mortgage unless you're after a very small one.

It's not a nice situation to be in but you need to get it paid off pronto, give it a year or two and then apply for a mortgage (through a broker.)  That's my take on it and it's only advice.  Take from that what you will.

The debt belongs to the person whose name it’s under, relationship status is irrelevant here. 

Lenders are going to assume that its all in the same pot.  If the wife has debt repayments of £200 a month then if you apply for a joint mortgage, that's £200 taken off your affordability, regardless of whose debt it is. I wasn't talking "the law" and I thought "but a lender is going to assume that all liabilities/debts/bills get split down the middle when you're a couple" made that clear?