Mortgage with DMP - but defaults have dropped off

richardwhite

Hi, 

firstly thanks for any help or advice offered. 

In 2017 I got into some financial trouble and ended up in a DMP (managed by stepchange). The 6 debts were all defaulted in the same year. This DMP is still ongoing (I’m still paying and haven’t missed a payment in 7 years) however all associated defaults dropped off my credit file in 2023, so there’s no trace of them and my credit rating is now ‘good’. 

I have been offered a deposit to try and buy a house by a relative (I’m currently renting privately, never missed a payment in 20 years and buying a house would actually be cheaper monthly payments). 

My question is…am I chasing an impossible dream? Is it worth my while attempting to get a mortgage when the DMP is ongoing? How much will the DMP payments affect my chances of getting a mortgage? I’m hoping the fact the defaults are gone will work strongly in my favour. 

Im clueless when it comes to mortgages and I’m aware talking to a good broker is the right thing to do, but I’m curious if anyone has experience of this situation and can potentially save me a lot of hassle by giving me an idea of my chances before I get my hopes up any further. 

Thanks

summerb64

It might be okay through a specialist lender with the defaults gone, if you have lots of creditors. 

I was able to get a mortgage whilst still paying an amount to a debt collection agency, just avoided the lender that I defaulted with, told my mortgage broker to avoid them, and the high street lender I got my mortgage with only asked for a payslip so didn’t have to worry about bank statements showing the payment to the debt collection agency. 

Hoenir

The financial institutions you have defauted on are like elephants. They'll never forget.  Seek the assistance of a specialist broker. The downside maybe a higher than average interest rate. 

ACG

This is one of those where you probably can get normal rates. But it wont be for every lender.
One for a broker as it will be based on the questions asked and whether they ask for statements and if they do, will it be a problem. 

I would not say its the impossible dream though.