Mortgage with DMP

AdrianC

Kl2020 said:

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.

Remember what that DMP is. It's you unable to pay back the money you owe.
Yes, this was debt acquired during an abusive relationship - but those debts are, unfortunately, in your name. And that's the bit that counts in the hard-nosed world of lending.

Your first priority is to pay everything back. Don't try to "save" to build a buffer (beyond that essential for a reasonably comfortable normal life), because it's simply not the lack of a deposit that's stopping you buying. Clear that big black mark first. You're still earning the same and spending the same. It's just a case of which direction the surplus goes to. Once the debt is cleared, that surplus can still go to your deposit saving.

It's still the same amount in total but you'll clear the debt faster - you're currently paying £138/mo towards an £18,000 debt - that's nearly eleven years to clear it... You don't say how much you're saving, but the £5,000 you've got on one side now will take three years off that immediately.

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 

If he's worth being with, then he'll understand why you have that DMP, and he'll prioritise you over simply owning a pile of bricks.

Angela_D_3

ive had to start again at 45 its not the end of the world.  In many ways renting is better when you have little children or one income because your costs are fixed.  

MovingForwards

I started over at 40 with more debt than you and in a flatshare.
While clearing the debt, I was saving at the same time. After a while I got a sub-prime credit card, about 6 months after that my own bank let me have one.
5 years after starting over, I'm in my own home and waiting for my credit history to clean up so I can remortgage to a mainstream lender. 

I was in contact with my broker for ages, before being in a position to apply for a mortgage. I've already tagged him and know other members are also in their own homes thanks to him.

Kl2020

Moving forwards. Thankyou and well done on building a lovely future and clearing your debts. Can I ask how long once your debts were clear till you were successful for a mortgage. Did you buy with someone else than strengthened your application or was it you buying alone xx

Kl2020

AdrianC said:

Kl2020 said:

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.

Remember what that DMP is. It's you unable to pay back the money you owe.
Yes, this was debt acquired during an abusive relationship - but those debts are, unfortunately, in your name. And that's the bit that counts in the hard-nosed world of lending.

Your first priority is to pay everything back. Don't try to "save" to build a buffer (beyond that essential for a reasonably comfortable normal life), because it's simply not the lack of a deposit that's stopping you buying. Clear that big black mark first. You're still earning the same and spending the same. It's just a case of which direction the surplus goes to. Once the debt is cleared, that surplus can still go to your deposit saving.

It's still the same amount in total but you'll clear the debt faster - you're currently paying £138/mo towards an £18,000 debt - that's nearly eleven years to clear it... You don't say how much you're saving, but the £5,000 you've got on one side now will take three years off that immediately.

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 

If he's worth being with, then he'll understand why you have that DMP, and he'll prioritise you over simply owning a pile of bricks.

I needed to hear this. Thank you i am definitely buffering and saving money to hide behind my debts. I think this post and the comments has helped me to realise that debt is the most important thing right now and I need to prioritise and pay this off. It will definitely clear some head space and worry going forward 

Kl2020

In relation to finance. What can I do to build my credit rating. It is currently 199 and on the red mark. 
I have all my debts with stepchange. I have utility bills and a contract phone. Other than that. I have no credit cards or other debts outside of my DMP. 
I would like a finance car but unsure if this will improve my credit rating or make it worse. Plus I know not alot of car finances will accept me. 
I just want to see that credit file go up instead of down. I want to keep improving my finances and building a better future for myself in the long run 🤞🙏 xx

MFWannabe

Kl2020 said:

In relation to finance. What can I do to build my credit rating. It is currently 199 and on the red mark. 
I have all my debts with stepchange. I have utility bills and a contract phone. Other than that. I have no credit cards or other debts outside of my DMP. 
I would like a finance car but unsure if this will improve my credit rating or make it worse. Plus I know not alot of car finances will accept me. 
I just want to see that credit file go up instead of down. I want to keep improving my finances and building a better future for myself in the long run 🤞🙏 xx

I think getting car finance would be a very bad idea. It’s another debt and will not look good! You need to pay off your existing debts as quickly as you can and then think about repairing your credit rating. 

MovingForwards

Your credit score and rating are not seen or used by mortgage lenders, it's the credit history eg late / missed payments, defaults, AP / AR markers, CCJs etc.

Do not get finance for a car, that will reduce your affordability even further. As I said before I took out a sub-prime CC, spent a bit on it each month, paid it in full the day the statement was produced; that shows you can manage credit.

I purchased my home alone, on an income of just over £20k and didn't borrow the maximum I could either. I'm on a high interest rate, but I've made overpayments on it since getting my keys.

I had my broker for about 18 months and was guided by his knowledge as to when the right time was for me to have a DIP. As I knew I was getting closer, I upped looking for properties and pounced on the one I had been watching for about 3 or 4 months when I did get my DIP, none of the others had everything I wanted. A few days later my mortgage application went in.

AdrianC

Kl2020 said: 

I would like a finance car but unsure if this will improve my credit rating or make it worse. Plus I know not alot of car finances will accept me. 

You have five grand in savings.
Use half of that to buy a perfectly good car outright, instead of borrowing three or four times that...

[Deleted User]

Get the car inspected by a mobile mechanic first though.  You don't want to throw that money away on a dud.  A mobile mechanic, not a friend who fiddles with cars occassionally.  You could change your mind about the reliability of that friend.