Get a Mortgage When I’m In a Debt Management Plan
Published 15th August 2017
I went through a rough patch a few years ago when I was out of work during the recession. This meant I got behind on some payments, went into a debt management plan and had defaults registered against me. Most of them are over 4 years old now and I think they are all paid off but still show on my credit file.
My parents have offered me a 10% deposit but because of my defaults I’m struggling to get a mortgage. I’m in permanent employment but my credit score is improving but is only Fair at the moment.
Have I got any chance of getting a mortgage?
You’re not alone in this kind of situation, we see lots of enquiries from people who were made redundant or lost their businesses as a result of the recession. This tends to have a knock on effect on their credit history as they are simply unable to meet their credit agreements.
First of all, don’t worry about your credit score/rating. The actual score on your credit file doesn’t matter, as lenders will give you their own score based on their own preferences and policy, one lender may rate you 200 where another 800, it just depends on the data on your report and the lender’s appetite for this kind of business. It’s also important to note that the experts we work with have lenders who credit search, not credit score, so as long as the info you have given us is correct, there will be some lenders out there for you, and at really competitive rates currently too!
There are some positive factors to your case: A) you have some deposit, and B) the defaults are now quite historic. Although the credit issues will stay on your file for 6 years, the fact they are 4 years old means lenders can see there has been a line drawn in the sand since then (providing you are all up to date currently and haven’t had any mishaps since). The fact they’ve been paid off too is a plus point as it shows you’ve made the effort to get things back on track.
Some lenders are still happy with defaults being on your file so don’t worry if some still have a balance.
When you’re ready to get approval with a lender make an enquiry and one of the experts will help you get sorted!
SUCCESS! After getting in touch and advisor secured a 90% LTV mortgage for Callum at 5.39% fixed for 2 years.
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