Mortgage with DMP

Kl2020

Hi thanks for reading. Any help appreciated. I left an abusive and financially controlling relationship a few years ago which ruined my financially. I left the relationship and ended up with debts as an outcome. I managed these well but eventually things became tight which left me with no other option but to set up a DMP before my finances got out of control. I hadn't missed any payments up until the point of getting a DMP but got the DMP to avoid this happening in the future as each month was tight. Whilst setting up the DMP a few payments were missed as they advise you not to pay until they have set it all up. 

Anyway I am now wanting to look at buying a house with my new partner and wondering how this will affect me and if its possible. I have changed my life around finances wise and things are starting to look up. I have just finished studying after 4 years (hence the debt also) and I now have a secure job with an income of 28,500 and my partner also has a secure job with an income of 25,500, both out wages will rise next year also, mine to 31,000 and his by 1 or 2k. We have both owned houses in the past with ex partners and sold them. All mortgage payments were made and no red mark against our names there. I have £5000 savings so far and plan to continue to save but we are super desperate to buy a house in the next year at around 200k and I was wondering if this is possible with my DMP only been set up in May/June 2019. I still have the DMP with step change and my plan is to keep this and pay it off over the next 10 years at a small amount as this is manageable. However, I would still like a mortgage and a life around this if possible. 

I worry about this daily and worry that this could majorly affect us buying a property together in the future. I am also wondering if anyone could give any advice on deposits and how it works also as I'm worried about needed a huge lump sum because I believe we will not be classed as first time buyers because we have owned a home each in the past even though we no longer do. 

Any advice is welcome as I feel abit dumb and naive to it all.

White_rose

Firstly, well done for leaving and moving on from that relationship. I was in a similar situation and understand how it feels to be left financially disadvantaged. 

Can I suggest you post this on the mortgage forum board? It’s frequented by mortgage advisors who can give an idea of what is and isn’t possible and give some tips. Good luck  

Thrugelmir

Suggest you tackle that DMP head on. Planning to repay it over 10 years would reflect badly on you if a mortgage is your plan. Though there'll be sub prime lenders who will let you have the money at a considerable cost. 

MovingForwards

How much is left to pay on the DMP?

There are sub-prime lenders who usually accept people in DMP's, provided they have been run satisfactory for 12+ months, however it's a hefty deposit and high interest rates. 

Even if you pay the DMP off, then go for a mortgage, lenders want a minimum 12 months from completion of the DMP.

Are you taking any steps to show you're ok with credit now? Eg a credit card paid in full each month, utility bills in your name etc.

AdrianC

Remember that a lender isn't, unfortunately, that interested in the back story. All they are worried about is that you are currently in an agreement to pay back previously borrowed money in a smaller amount and/or over a longer period and/or for less interest than you were contracted to.

Considering you're asking them now to lend you a lot more money, when you still can't pay the last lot back, that's something they aren't terribly fond of for fairly obvious reasons.

Kl2020

So I currently owe just over £18,000 in all. All my debts are together with step change so I can manage them all in one place. I am paying £138 a month back at present. By paying a small amount I find it manageable aswell as been able to save for a mortgage. However I know this kind of outweighs the odds. I know I could comfortably manage a mortgage and pay my debts off now as I am in a good financial position but I know all the banks will see is the letters DMP and probably decline me a mortgage. I don't want my partner to have to suffer and us not get a mortgage all because of my past financial issues. It makes me feel sick with worry and the last thing I want is him feeling like I'm bringing us down later down the line if we can't get a mortgage 

[Deleted User]

How secure is your relationship?  If secure enough, it might be wise to have a discussion with him.  Personally i would also put back the mortgage plans, and put everything I had into paying off the debt.  Say three year plan, £6k a year, £500 a month.  Then start saving a deposit when things are more certain, you are earning more and have a longer history of a good financial management. You can rent.., lots of people do and have a relationship.  A relationship shouldn't really be based on whether you can get a mortgage or not, that's a plus, not the be all and end all.

MovingForwards

@ACG is a broker who specialises in clients with adverse credit history, maybe he will have a little input.

Kl2020

The 3 year plan sounds amazing. I'm just worried about putting my life on hold for 3 years to pay off these debts to then still get declined a mortgage. I'm 33 now so age isn't exactly on my side. I don't want to be in my late 30s when getting a mortgage. 
I think the sad thing is I know I can afford, especially now I have a secure job for life and a good wage coming in. I rent currently at £600 a month and have been paying the bills alone for a few years. It is only now me and my partner are co habiting. However this will help me to save more money. 
We have a good secure relationship, however like I say he is keen to buy a house 

MFWannabe

Have you spoken to your partner about how you feel? The worrying sick and feeling like you’re holding him back if you can’t get a mortgage? He won’t want you to feel that way x 
I’d have a good talk with him about it and also your DMP;,see how you can pay it off quicker and get rid of it out of your life; then you’ll feel like you can truly move on with your life and leave all that in the past x 
Ref deposits; you’ll most likely need a 15% deposit plus you’ll need to factor in purchase fees, ie solicitors, surveys, stamp duty 
Try not to get disheartened, you’ve come such a long way, it’s not easy coming out of an abusive relationship and building yourself back up again 
You need a long term plan, there’s not a short quick fix I don’t think. And believe me at 33 you’re still very young! I was in my mid forties before buying my first property! 
Good luck x 

Kl2020

Thankyou so much for all your uplifting messages. It has definitely made me think more about things and changed my outlook on prioritising debts first over becoming a home owner x