Remortgage with dmps, years before a high Street bank

doozeruk · 12 April 2018 at 11:04AM

It's been an awful long time since I frequented this forums, I used to be a helper instead of those in need of help.. How times change!

So my question is:

I am looking to remortgage with my wife this summer and have already seen a broker regarding this, but would love to hear more than their opinion.
I have 5 defaults on my CF, 4 of them end by August this year the last one not until Oct next year. I am in dmps with all creditors and they have all at some point or another been sold on to specialist debt companies.

We have been told we can remortgage with an adverse lender at 3.8% fixed for 2 years with the defaults in place so not too bad. However she has explained that even when all those defaults have disappeared and we come to remortgage again in 2 years because my debts will still not have been settled and will still show on bank statements as being paid a high Street bank will not touch us.

Anyone back this up please?

Many thanks

kingstreet · 12 April 2018 at 12:55PM

I would have given you a definite maybe, rather than a definite no.

There are lenders who don't ask for bank statements and their adverse credit questions are centred only on the latest six years, not on "ever"...

doozeruk · 12 April 2018 at 1:11PM

In all honesty I didn't even give it a thought that the continued debt after 6 years was relevant. Combined they total just less than 11k and she has suggested that we use part of the remortgage to pay these off to avoid any problems in 2 years.
To be honest it makes sense as it will all be gone but it was something I was totally unaware of.

Thank you

Brock_and_Roll · 12 April 2018 at 3:41PM

By any historical context, being able to get a fixed rate of 3.8% with 5 defaults / current DMP on file is surely about as good as it will ever get!

[As a banker, I would love to have a good rummage through that lenders profitability, default probability and loss given default calculations]

I am by nature cautious, but I would expect that as interest rates slowly rise amidst continuing economic austerity, there will be a slow tick up in mortgage default rates and "flight to quality" in terms of credit being offered.....so today is probably as good as it is going to get.

feekerry · 12 April 2018 at 3:58PM

I’ve finished my dmp now but recently remortgaged whilst still on my dmp probably with the same lender you are talking about, tho my rate was lower. Any arrange to pay markers will last on your file for 6 years after the last payment so will be evident to a lender. If they are definitely all defaults and not arrangements to pay then unless you are asked for bank statements that show the dmp payment I’m not sure how a new lender in 2 years would know about it??

kingstreet · 12 April 2018 at 4:11PM

doozeruk wrote: »

I am in dmps with all creditors

I suspect you mean payment arrangements. You would have only one DMP supervised by a third party, perhaps StepChange or PayPlan.

doozeruk · 12 April 2018 at 7:12PM

kingstreet wrote: »

I suspect you mean payment arrangements. You would have only one DMP supervised by a third party, perhaps StepChange or PayPlan.

This makes me wonder whether I am actually paying a true DMP as there are no third parties involved only the companies that bought the debts from the original defaulters. PRA and Cabot own 4 of them. I was never instructed to pay up, instead with the help of the Citizens advice I wrote to each credit card company and offered to pay what I could afford with an income/outgoing expense sheet. These were all accepted and hence I've never overpaid on any of them. Eventually the debts were sold on to the mentioned above and I continued to pay at the original rate.

Feekerry, are you saying that although my defaults fall off my Cf this year it will take a further 6 years for the evidence of being in an arranged payment after settlement to fall off too?

Thanks to everyone for your answers

feekerry · 12 April 2018 at 7:54PM

If they are proper defaults then they drop off 6yrs after default date. All good. However if they are arrangements to pay then they drop off 6 yrs after you make the final payment. On my dmp I had 5 creditors. All sold the debts, 3 were defaulted. The other 2 were marked as arrangements to pay, this means for me the defaults finish this year but the 2 that are marked arrangements to pay will now be on my credit file for 6 years since I made the final payment in February. I wish I had pushed the 2 companies to default me like the others at the time but I thought it was worse but in hindsight it wouldn’t have been

feekerry · 12 April 2018 at 7:55PM

You are effectively doing a self managed dmp

doozeruk · 13 April 2018 at 7:50AM

Okay thanks I think that clears that up then. All the markers on my CF are listed as 'DF' so would assume that they will all be gone very soon.

Now as long as the underwriters approve everything I need to start writing full and final settlement letters!

Remortgage with dmps, years before a high Street bank

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