Help from a mortgage broker please!

PETRA798

Hi all

Looking for some advice please. Long story short, marriage breakdown, looking to sell the house, pay off debts due to husband's business going under, and buy a house each with a low LTV mortgage (through an adverse credit mortgage broker).

Lucky to have lots of equity in the house, but unluckily have 5 defaults registered in my name totalling around £25K due to credit cards being used to finance the business (he has around the same amount in his name). Have been in a TPP, then a DMP with Stepchange for 3 years. My questions are:

1. Should I attempt to make F&FS offers with all the creditors banking on them taking low offers? (obviously not letting on that we'll have x amount equity from house sale).

2. What are the advantages to asking them for the CCAs, and is there a template letter? I'm guessing this gives me more bargaining power but could it give them the hebegeebees and make them take more aggressive action if they think I'm trying to wriggle out of paying them at all?

All advice very welcome please, and what you would do in this situation. 

I'm thinking a potential mortgage lender would prefer to see things settled on my credit record, but I guess PRA might mark them as partially settled if they take a F&FS? Would that then stay on my credit file longer? So confused as to which path to take desperately need a fresh start.

THANK YOU!

ACG

1. It is difficult to answer this. If your plan is to apply for a mortgage in the next 2-3 months, paying it off now is unlikely to alter your options. It might help affordability if that is an issue, but it will also (presumably) be a smaller deposit. A lot more information is needed to be able to answer that. 
2. CCAs? You are one in a miilion people in some sort of payment plan. Stepchange will get settlement figures for you if that it what you want. Let them deal with it, that is what they do day in day out. 

You need to get your reports over to a broker really. Everything is at that stage where it will still be showing on your credit report by the sounds of it, so your options will be limited but you will have options (plural), so you will have some say in what you want - ie smaller mortgage and the DMP or bigger mortgage and no DMP. Rate wise, tricky to say without knowing more, but I am not sure you will be looking at normal rates, maybe something closer to the 4% mark but dont hold me to that as there is limited information to go off. 

PETRA798

Thanks for your reply @ACG.  Yes I want to get an agreement in principle ASAP so I know what kind of house I could afford. Financially affordability won’t be a problem I’m looking at a 50% LTV at the most so I guess I’m a safer bet. Nice to know I will have options. Ive contacted a broker and sent him my Equifax report awaiting a reply. Maybe I would be better off putting a larger deposit down like you say and just continuing with the DMP. I’ll need to work out a new budget for StepChange - I’ve heard they want every lender to be paid off equally and don’t do hard negotiation so I may try and tackle that myself if needs be. I’m still worried that partially settled defaults will stay on my record even longer than the current defaults to be honest.
Thanks for your help!

MovingForwards

There's more than one credit reference agency, all reports need to go to your broker to ensure accurate information is obtained from it. Not all lenders report to all CRAs.

Step Change will not negotiate debts like you could do it yourself. You can make low offers to try and pick some debts off while negotiating others.

Partly settled / fully settled / not settled defaults all fall of your credit history 6 years after they were put on. It's only AP / AR markers which stay for 6 years after they have been paid.

Doing number 2, allows number 1 to potentially have a better result for you and they don't change their stance and go after you harder.

You need to be 12 months clear of your DMP or have the DMP running still when applying for a mortgage.

ACG

The products will be the same with a 40% deposit as they will be with a 50% deposit so you probably have some flexibility there.