Debt Management Plan Mortgages - Can I Get a Mortgage After a Debt Management Plan | Simply Adverse

Entering a debt management plan can be an effective way to take control of your debts and improve the health of your finances. If you’re currently in a DMP or have recently left one there will be some impact on your ability to get a mortgage or remortgage. This doesn’t however mean it will be impossible.

If you've been wondering “does a debt management plan affect your mortgage” then talking to a specialist DMP mortgage broker, such as the team at Simply Adverse can help to answer that question. Working with us means that you’ll have access to many more mortgage deals. These include deals from DMP mortgage lenders, and deals that you won’t find anywhere else.

What is a Debt Management Plan?

A debt management plan lets you pay off non-priority debts at a rate that you can afford. Non-priority debts include personal loans, credit card or store card debts, payday loans and overdrafts. A debt management plan can’t be used to pay off priority debts such as fines, utility bill arrears, child support, and mortgage payments or rent.

With a debt management plan, you make one monthly payment which is then divided among your creditors to pay off your debt.

If you find yourself struggling with debt, a debt management plan can be an ideal solution. It can help you to reduce your monthly outgoings and interest rates, as well minimising the risk of more major debt problems such as defaulting on loans or being declared bankrupt.

You can arrange a debt management plan through a variety of organisations, including those offering free debt advice and fee-paying providers. Whoever you decide to approach to draw up your debt management plan, they must be authorised by the Financial Conduct Authority. You can check the financial services register online.

When you arrange a debt management plan through a DMP provider, you won’t need to deal with your creditors yourself, which can take some of the stress out of the situation. A DMP is not legally binding so you can cancel it at any time.

Is a Debt Management Plan for Me?

While you should take professional advice to ascertain whether a DMP is suitable for you there are a few points to consider that may help you decide.

A DMP may be for you if: -

• Making 1 monthly payment to sort out your non-priority debts would help you budget.
• You can afford your priority debts but are struggling only with non-priority debt.
• You’d like someone to talk to your creditors for you.

However you should also bear in mind: -

• Your creditors may not freeze the interest on your debt, so it could take longer than you think to pay them back.
• It also may take longer to pay back your debt as you will be paying back less than normal.
• Some DMP providers will charge you a fee - but there are lots of reputable providers who will not charge.
• Creditors may refuse to be part of your DM.

Does a DMP Affect Getting a Mortgage? - DMP FAQs

A debt management plan can affect your ability to find a suitable mortgage deal.Firstly it can make it harder as the monthly payment that you are making to cover your non-priority debts will, together with your other financial commitments, inevitably reduce the amount of your disposable income, in other words a lender may feel that you won’t be able to afford any monthly payments.

A debt management plan will also affect your credit report. While a DMP is not recorded on your file as a separate item, creditors should add a ‘flag’ to your account to indicate that your repayments are part of a DMP.

Getting a Mortgage With a DMP - How Does it Work?

If you’re thinking the time has come to buy a house, or you’re thinking about remortgaging your current property, it is possible to find a deal. Lenders will take into account multiple factors when it comes to making a decision about your application.

• Have you paid your DMP on time?
  Lenders will request confirmation from your DMP provider that payments have been made on time.
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• Was the DMP closed or cancelled mid-term?
  If you settled with creditors directly, rather than continuing with a DMP, some lenders may not be willing to accept your application.
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• How long have you been in your DMP?
  Lenders will generally be more sympathetic to your application if you have been on your DMP for a long time. While criteria differs for individual lenders, you will be expected to have been on the DMP for at least 12 months.
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• Is your DMP satisfied?
  You will have access to a wider range of deals if your DMP is satisfied, i.e. you have finished paying off the debts involved. However, you may still find more restrictions than a borrower who has had no problems with credit in the past.
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• What type of mortgage are you looking for?
  There tends to be stricter criteria for first-time buyer mortgages and buy to let mortgages. Getting a remortgage with a debt management plan tends to be slightly easier.
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• How big is your available deposit?
  ‍The bigger your deposit is, the less you will need to borrow. This means that you may find that more deals are available to you. All applications depend on individual circumstances, but applicants with a satisfied DMP and a large deposit generally have the greatest chance of success.

Take Our Quiz

With so much to consider it can be difficult to assess whether you are likely to be able to find a mortgage or remortgage or work out how much you may be able to borrow.

Taking our quiz is the first step in understanding your chance of finding a mortgage. Once you’ve taken our quiz, you can talk to one of Simply Adverse’s experts. We’re available 7 days a week to discuss finding a DMP mortgage lender in the UK.

Which Mortgage Lenders Does Simply Adverse Work With?

Choosing Simply Adverse as your DMP mortgage broker gives you access to a much greater number of lenders than you may find on the high street. When you have an adverse credit history this access to multiple lenders can help you find a deal when otherwise you may fail to.

As we are a whole of market mortgage broker we work with not only adverse credit friendly mortgage lenders, but also niche lenders and high street lenders. Simply Adverse also has access to broker only deals. The main mortgage lenders that we work with, are: -

For more information about the mortgage lenders that we work with at Simply Adverse, you can contact our expert advisers 7 days a week.

DMP Mortgages UK: Speak to The Experts At Simply Adverse

If you’ve been concerned that a current or past debt management plan means that you won’t be able to find a mortgage or remortgage deal, let Simply Adverse do the work for you. We have years of experience finding competitive deals with the best rates for people just like you. There is no need to struggle alone.

Join the hundreds of homeowners who have used our 5-star rated mortgage broker service, designed specifically for applicants with an adverse credit history. Pick up the phone or request a callback today and start your journey to a great mortgage deal.