Can I get a mortgage while on a DMP?
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eyhorne
Posts: 3 Newbie
Hi - my friend has just been put on a DMP but is struggling to pay her rent in a HA property (£700) - rental through private landlords in her area for similar properties is £900 so she would like to be able to buy a small place which would mean the mortgage would be much less a month.
Is there any chance at all that should could get a mortgage - she is in a steady job (11 years) and is paid monthly.
She was advised by the CAB that she should go part time as that would allow her access to more financial help - she is able to get food bags from Nourish weekly at present but not much else. She is a single mum with 16 years old - ex partner's debts have got her where she is now unfortunately.
Is there any chance at all that should could get a mortgage - she is in a steady job (11 years) and is paid monthly.
She was advised by the CAB that she should go part time as that would allow her access to more financial help - she is able to get food bags from Nourish weekly at present but not much else. She is a single mum with 16 years old - ex partner's debts have got her where she is now unfortunately.
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Comments
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It would depend on how everything appears on her credit report.
It is potentially possible, but it will not be at "normal" rates (circa 4%) and she would need probably a 15% deposit.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Hi - my friend has just been put on a DMP but is struggling to pay her rent in a HA property (£700) - rental through private landlords in her area for similar properties is £900 so she would like to be able to buy a small place which would mean the mortgage would be much less a month.
Is there any chance at all that should could get a mortgage - she is in a steady job (11 years) and is paid monthly.
Not a chance. Even if she wasn't in a DMP and had excellent credit if she's struggling to pay rent on a HA property she would fail affordability tests. Also the mortgage isn't the only cost you have when you buy a house - the total cost of ownership of a house in the lower end of the market is usually around that of rent of council houses or housing association houses.
Also where would she magic up £20k or more for the deposit and fees? You're looking typically at at least a couple of grand just in fees.0 -
Not a chance. Even if she wasn't in a DMP and had excellent credit if she's struggling to pay rent on a HA property she would fail affordability tests. Also the mortgage isn't the only cost you have when you buy a house - the total cost of ownership of a house in the lower end of the market is usually around that of rent of council houses or housing association houses.
Also where would she magic up £20k or more for the deposit and fees? You're looking typically at at least a couple of grand just in fees.
I think you are looking at it too simplistically.
I used to rent, it cost me £750 a month.
I bought a house and the Mortgage was £350 a month - even if the rate had been around 7%, it would have been less than £750 a month.
It is now more often than not cheaper to own than it is to rent, that takes in to account keeping on top of things.
The deposit may be a gift from parents?
So rather than say it can not be done based on limited information it might be better to ask questions to help you give an answer or at least play devils advocate and give an answer that is not biased one way or the other.
...Just my thinking.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Any bank ,ending to someone in this situation should be hauled over the coals by the regulator.
It is like 2008 never happened.0 -
Mortgage lenders have tightened lending criteria in recent years, affordability is everything these days, the negative information due to her been on a DMP will go against her I am afraid.
She could try a broker, that would be her best bet to be accepted.I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter0 -
I think you are looking at it too simplistically.I used to rent, it cost me £750 a month.
I bought a house and the Mortgage was £350 a month - even if the rate had been around 7%, it would have been less than £750 a month.It is now more often than not cheaper to own than it is to rent, that takes in to account keeping on top of things.So rather than say it can not be done based on limited information it might be better to ask questions to help you give an answer or at least play devils advocate and give an answer that is not biased one way or the other.0 -
Any bank ,ending to someone in this situation should be hauled over the coals by the regulator.
It is like 2008 never happened.
Absolutely!
I would walk out of my employer if they lent in such circumstances, however, depressing the wall of cheap money and a decade of low interest rates means that brokers may be able to find someone to lend - does not make it a good idea though!0 -
they will fail a mandatory affordability test. It isn't a biased answer, it is the truth.
I must have missed the post that confirmed their income, expenditure and the Mortgage they want.
I would love to know how you know they will fail an affordability test. I do this sort of thing on a daily basis and with the only information to go off being that they are struggling to pay rent does in no way help me work out whether or not they will pass affordability.
The rent may be 25% lower than anything else out there, but it does not mean that a Mortgage would not be less again.
In terms of initial costs, aside from the deposit - those costs could be £0. Free val and legals are available.
You are making assumptions which does not help the OP.
You could be 100% spot on, but you could be far from the mark.
Unless you know their income, their expenditure and the size of the Mortgage they are after, the "truth" as you put it, is that you have absolutely no idea.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
I must have missed the post that confirmed their income, expenditure and the Mortgage they want.
I would love to know how you know they will fail an affordability test.The rent may be 25% lower than anything else out there, but it does not mean that a Mortgage would not be less again.Unless you know their income, their expenditure and the size of the Mortgage they are after, the "truth" as you put it, is that you have absolutely no idea.
They're in a DMP, they have no money saved up, they're struggling to pay their rent. If you think that they could get a mortgage then it would appear it is you who doesn't have a clue. Given you claim "to do this sort of thing on a daily basis" I can only come to the conclusion if you work for a broker, estate agent or financial institution you work for one of those scummy sub-prime lenders who don't give a toss.0 -
I must have missed the post that confirmed their income, expenditure and the Mortgage they want.
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