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    • MBFF
    • By MBFF 6th Oct 17, 11:59 AM
    • 14Posts
    • 0Thanks
    Advice needed for mortgage after DMP
    • #1
    • 6th Oct 17, 11:59 AM
    Advice needed for mortgage after DMP 6th Oct 17 at 11:59 AM
    Hi, looking for some advice as its been over 10 years since we looked at mortgages.

    In 2012 we entered a DMP due to redundancy and defaulted on everything we owed, 3 credit cards (4k, 2k, 1k) a large loan (20k+) and our overdraft (1k) In total around 28k. We have kept payments up with Stepchange and increased payments to bring our original end date from 2020 to March next year which coincides with all of our defaults being 6 years old.

    We are in a substantially better position now and pay Stepchange 400 a month and have just over 2k left to pay on it. The DMP has helped us live within our means and we have a healthier relationship with money than we had 6+ years ago. We now have 2 children of primary school age.

    We have never missed payments on our mortgage or any other bills other than when we defaulted on the credit.

    We are looking at moving house around the middle of next year, will our previous situation affect us? We would be completely honest and go through a broker but are wondering whether even though the defaults would no longer show on file if we would have trouble borrowing.

    We have around 60k equity in our house and have a few thousand in savings for an emergency fund. We have salaries of 40k and 18k with 3k in bonuses every year (guaranteed)

    We have no other credit other than the defaulted ones, we are both on the electoral roll, with stable jobs of over 3 years, our credit file shows mobile bills and a Very account which are always kept up to date and under 20% utilised, we have no overdraft on our current account and it always has money available. We had car finance 3 years ago which was paid in full and shows as such. I check all 3 credit reports religiously each month and they are accurate. The only question mark around our reports is we took out a Northern Rock Together mortgage for 100% 12 years ago for our current home and the loan element obviously appears as a separate entry (this wasn't included in the DMP and has been paid in a single payment with the mortgage each month), would this count against us or is it worthwhile adding a note to the file as this would be cleared at the same time as we moved and cleared the mortgage.

    We currently pay 620 a month with Landmark (who took over the NR mortgage) and 400 to Stepchange so both of these would be free for any other mortgage payment if we were able to get one. We have very average outgoings as we budget to ensure we never get in the same position we were in. I have no idea on what our affordability for a mortgage would be, we have been looking at homes in the region of 280-300k, is this realistic?

    Thanks in advance
Page 2
    • MBFF
    • By MBFF 8th Oct 17, 8:55 AM
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    • 0 Thanks
    As I've mentioned all the way through this thread, I wouldn't have a DMP. I would be looking to apply after the DMP has been cleared and all the defaults have been removed from the credit report (March 2018 for both)

    I've never referenced my 'score' only my history which wouldn't show any trace of a DMP or past credit problems. With no trace of a DMP or defaults on file would I still be looking at higher interest rates?

    I'm aware the DMP is a commitment that's why we are looking at only applying after this stops so we have an additional 400 of disposable income. In terms of not being good with money it was brought on by a redundancy rather than poorly managed credit, I would like to think the information I supplied shoes us being in a better place where money management is concerned
    • glentoran99
    • By glentoran99 8th Oct 17, 8:59 AM
    • 5,328 Posts
    • 4,512 Thanks
    I think the emergency fund is a fantastic idea and would recommend retaining that no matter what, especially as you have handled the DMP so well.

    Likewise as my previous post, there will be lenders that will consider you once your DMP has been cleared, however, these won't be mainstream high street lenders.

    With a deposit of 50 - 60k and a joint income of 58k, I would personally bring your expectations down slightly to around the 250k purchase price, to allow for a mortgage of 200k and associated purchase cost (SDLT etc). This would allow for the increased interest rate you would most probably face post DMP.
    Originally posted by YHM

    Why not? Mine is mainstream and there will be no defaults showing on his account?
    • glentoran99
    • By glentoran99 8th Oct 17, 9:01 AM
    • 5,328 Posts
    • 4,512 Thanks
    Because your meant to disclose, anything other is mortgage fraud and it is based on trust and honesty isn't?

    You are higher risk than someone without a DMP and adverse credit and therefore you will pay more in interest.

    Get a broker to get your own individualised options
    Originally posted by csgohan4

    Only if asked, You are normally only asked any CCJs or bankruptcy, a DMP is neither and doesn't need mentioned
    • sammyjammy
    • By sammyjammy 8th Oct 17, 9:55 AM
    • 4,323 Posts
    • 4,666 Thanks
    If your accounts don't show any of the closed accounts and the defaults are gone from your credit record I don't see why you wouldn't get a mainstream lender. A DMP is an informal process, I agree with OP unless someone specifically asks on an application form it shouldn't be an issue. I would however be upfront and honest with a broker.
    "You've been reading SOS when it's just your clock reading 5:05 "
    • Thrugelmir
    • By Thrugelmir 8th Oct 17, 11:42 AM
    • 58,892 Posts
    • 52,220 Thanks
    The finance companies you defaulted on, will hold their own records. While you public record will be clear. Lenders will retain their records for many years longer.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
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