Getting a mortgage after a DRO

lshaslam

Hi just looking for some advice. 

I have recently entered into a DRO and the moratorium period will end in August 2025. 

I know this will impact my credit file for 6 years however in looking forward, I have been researching mortgages, shared ownership etc. I was under the impression that I wouldn’t be able to get a mortgage until the DRO drops off my credit file, but I have had some feedback about specialist mortgages which will lend even while the DRO is on the credit file. 

I don’t anticipate being able to save a large deposit so I will likely need a 95-100 LTV mortgage. 

My question is; are these specialist mortgages worth considering? Are they too good to be true? Or am I best to wait 5 years and start looking once the DRO is off. For note, I am 43 years old so I am conscious that I would want to get a mortgage as soon as I possibly can in order to have it paid off by retirement age. 

Many thanks 

ACG

A DRO is treated the same as bankruptcy. 
You can get a mortgage the day you are discharged, but rates will be high and you will need a good 30-40% deposit. 

Once you hit 3 years discharged, you might be able to get normal rates, but not at 95%-100% LTV. You cant get 100% mortgages even with perfect credit. 

I dont think (but I could be wrong) the speicalist lenders will do 95% and/or shared ownership. For a high LTV and/or Shared ownership you need minimum 3 years discharged but it is quite possible you might have to wait until the full 6 years discharged. 

lshaslam

ACG said:

A DRO is treated the same as bankruptcy. 
You can get a mortgage the day you are discharged, but rates will be high and you will need a good 30-40% deposit. 

Once you hit 3 years discharged, you might be able to get normal rates, but not at 95%-100% LTV. You cant get 100% mortgages even with perfect credit. 

I dont think (but I could be wrong) the speicalist lenders will do 95% and/or shared ownership. For a high LTV and/or Shared ownership you need minimum 3 years discharged but it is quite possible you might have to wait until the full 6 years discharged. 

Thank you for replying, that was what I expected. We had thought it would be sensible to wait till 6 years anyway but thought I would seek the views of others. I don’t want to be paying a large fee for a mortgage broker for a mortgage that either doesn’t materialise or is too expensive for us. It might be worth exploring at the 3 year mark I guess. 

Do you know, are you discharged when the moratorium period ends? 

ACG

A lot of brokers especially in the adverse world only charge on offer of a mortgage. Before you apply you will know what their fee is and what the rate your applying for is. 

I have never heard it referred to as a moratorium period, but you would come out of the DMP 12 months after it starts.