Can I Get a Mortgage with a Debt Management Plan?
We get plenty of requests for information about whether it is possible to obtain a mortgage with bad credit, whether it be for reasons of bankruptcy, an IVA or a debt management plan (DMP). A DMP is a formal arrangement between you and your creditors that details how the outstanding debt is to be addressed.
Plans like these can be an effective way to reduce unsecured debt and help a person regain control of their financial situation. However it will most probably mean that if you’re attempting to buy a home, you’re likely to get turned down by the major high street lenders.
The good news is that if you have been in an DMP or are even still in one, it is possible to get a mortgage. The basic principle in this respect is that the longer further through your plan you are and the less you still have to repay, the more chance you will have in getting the mortgage you need to make your home owning dreams real.
The same applies to the terms of the mortgage you get, as the more recent your money problems are, the more deposit you’ll have to put down and the higher interest rate you’ll pay.
You’ll also need to prove that you can now afford the repayments by providing detailed income and expenditure and the current status of your credit file with the three main credit referencing agencies; Experian, Equifax and Callcredit (Noddle / Transunion).
Ordinarily speaking, lenders and indeed mortgage brokers find it difficult to see past the fact that you’ve had money problems in your past. However, this trepidation is based on the fact that mainstream mortgage professionals don’t have access to the specialist, niche mortgage companies who make it their business to offer lending to people who have a less than perfect credit history.
We believe in second chances and people DO often turn things around and we can put you in contact with brokers who have access to exclusive mortgages that you won’t find anywhere else. These products are designed for those with poor credit, so you’ll have a much better chance of success.
If you have or have had a DMP and you’re thinking of trying the traditional route of mortgage application, we’d advise caution. The likelihood is that most, if not all mainstream lenders are going to turn you down and if you’ve unsuccessfully applied to 5 different lenders, that’s 5 different credit searches, all of which leave their mark and harm your future chances.
Improve your chances of application with Debt Management Plan mortgages for people just like you. Talk to one of our recommended brokers today!