DMPs and Mortgages

campbell9a

Been on a StepChange DMP for around 5 years with no missed payments and have roughly £16.5k left outstanding, all now owned by debt purchasers. A family member is planning to gift me around £15k and I'm wondering whether it's worth exploring full and final settlements through StepChange. Has anyone had success settling with debt purchasers for less than the outstanding balance, and if so what sort of percentage reduction did you achieve?

The gift has also opened up a conversation about moving house. We currently own a house worth around £260,000 with £190,000 left on the mortgage (currently on a 5% deal). My second question is around people's experiences of getting a new mortgage whilst on a DMP or after settling one. How long after settlement were you able to get a mortgage? Were you limited to specialist lenders? What sort of rates were you offered? For context, I've been on the DMP for around 5 years with a perfect payment history and no missed payments. Interested in hearing real-world experiences and, with hindsight, whether you felt settling was the right decision.

ACG

We do a lot of adverse, I dont normally get involved in the DMP side, but I think many creditors will accept settlements of around 50-70% from what I have heard from others.

How long after settlement were you able to get a mortgage? - You do not need to settle it to get a mortgage.

Were you limited to specialist lenders? No. But it depends largely on your credit report and who was involved in the DMP. Usually customers end up with little building societies or specialist lenders but occasionally you can get them on the high street - but all the stars need to align for that.

What sort of rates were you offered? Normal upwards. Although at the moment the gap between adverse and high street is quite minimal. Adverse lenders have not really upped their rates since this war kicked off so you might get lucky there.

For context, I've been on the DMP for around 5 years - thats good, everything should be historic and most lenders only need it to have been in place for 12-24 months.