The DMP & Defaults Success story

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This is a fairly common scenario we come across. We had a customer who had a Debt Management Plan (DMP) and 4 Defaults valued at around £10,000. The applicant was looking to purchase a new family home.

The situation

The couple were both employed back in 2019 and although they had a little bit of debt it was all manageable. However, one of the applicants was then made redundant. They were struggling to find a new job and so went self employed.

Unfortunately this did not pan out and before they had realised they had built their debt up to around £10,000. At this point they realised Self Employment was not working and so entered into a DMP.

What we did

The customer called up wanting to see if we could help them get a Mortgage. We discussed the situation and on the phone we were able to quickly determine that best case scenario we would be looking at rates of around 3%. Worst case scenario would be closer to 6% but there would be a few options between.

Once we had all of the paperwork we needed from the customer, we were able to speak to our account managers and determine what the options would be.

We had to look at packaging up the case for the underwriter. Because of the lenders we were looking at this meant we needed to get an explanation for the adverse. We also needed to get the relevant paperwork together and put it together. One thing we also try to do is to write a sort of “story” for the underwriter. We do this so they can understand the clients circumstances at the time.

Outcome

As hoped, we were able to get the customer a mortgage at 2.95%. However as good as that was the bit that I was quite impressed with was that the underwriter never came back and asked for any additional information or documents. This meant we were able to get the mortgage offer in 9 working days. That also included a surveyor going out to do the valuation!

Summary

When someone enters into a DMP it is quite typical that the debts you have will within a few months end up defaulting. It is also quite normal that some sort of life event is what lead to the DMP in the first place. It is not an issue that there was a problem the main thing is that the issue is now behind you and we can show that you are in a better place now. The best thing to help with an application when it comes to any adverse is time. As the saying goes “time is the greatest healer” and this was relevant in this application.

If you have Defaults, a DMP or any other adverse please do get in touch.