Short settlement and impact on future mortgage

ubercuba

I'm helping my brother-in-law and his wife sort out their finances.

They are planning to offer £10K on a £17K debt managed by Payplan. I understand this would result in a short settlement. 

However, they've also got mortgage challenges. Their current mortgage term expires in 3 years. They will still have a significant outstanding balance then - potentially around £70k. 

What will be the impact of the short settlement on their ability to negotiate an extended term with their current provider, probably extending it to their retirement age? Would the provider treat this like a new application and check credit files? If so, how would they respond to the short settlement?

Alternatively, what if they wanted to take out a mortgage with a new provider?

Thanks in advance for any advice.

sourcrates

Re-mortgaging with a current provider does not usually involve a credit check, with a new lender it will.

A partially settled account is slightly better than a defaulted one that isn`t.