Spoiler alert, it is possible to get a Mortgage with a Debt Management Plan (DMP). But that doesnt really give you the full story.
In this post we will look at:
- How lenders view DMPs,
- The costs,
- The requirements and,
- Lastly some success stories.
How do lenders view DMPs?
When we look at how mortgage lenders will view DMPs I think it is important to break down the mortgage lenders into sections as the way DMPs are viewed can vary.
I think one thing that is important to mention is that when you enter a DMP it is quite possible if there were a few loans or credit cards that you may have multiple Defaults. That is not a deal breaker. But when we look at high street lenders it may make it difficult to pass the credit check.
If we look at non high street lenders, generally (though not always) they will take the view that the defaults which formed part of the DMP will be ignored.
| Lender | Do you accept DMPs? | Do they need to be satisfied. | DMP payment or commitment payments used for affordability? | Rates |
| High Street | Unlikely but some lenders may subject to credit score. | In most cases yes | DMP (if accepted) | Normal |
| Non High Street | Some will | Not always | DMP usually | Maybe 0.5-2% above |
| Specialist | Most will | Not usually | DMP usually | 1.5-3% above high street |
The costs
I have included the costs in the table above in terms of rates.
We have managed to get clients with DMPs through on the high street before. The examples for these are where the DMP has been going on for over 6 years. All of the associated adverse had dropped off the credit report. Obviously we had to explain the monthly payment to StepChange but the lender was fine with it.
Another example is where the DMP was built up from things like parking fines which never went onto the credit report. Although the DMP was relatively new, there was no adverse associated with it as nothing appeared on the credit report.
The Requirements
From a mortgage lenders perspecitve to accept the DMP there is usually only one requirement. That being that the DMP needs to have been run satisfactorily. Some mortgage lenders need this to have been for 12 or 24 months.
That can mean if you have been in the DMP for less than a year or 2 your options could be limited. But again, it will not be a deal breaker.
DMP Mortgage Success Stories
When I speak to many of our customers, its the Success stories that convinced them to get in touch. That could be because they seen something similar to theirs or even worse. After reading them they were sure we could help. Or the fact that we had dealt with similar scenarios in the past and been able to help. They knew we would be sat here judging them.
DMP Success story – This one is where we were able to secure a couple a Mortgage with an ongoing DMP. The DMP was caused by a change in circumstances. We were able to secure them a rate of 4.2% which in 2023 was competitive as most lenders on the high street were around 4.5-5%. We did this by going to a building society who were offering cheap variable rates at the time.
The DMP & Defaults Success story – This was a Mortgage we did for a couple who had defaults due to entering the DMP. We were able to get them a mortgage offer in 9 working days! It went through so quickly even we were surprised (but I put that down to doing a good job with the packaging for the underwriter). This DMP was caused by redundancy.
Summary
You can probably see from this post that we know what we are talking about. We know the lenders, we have an idea of the rates and we have success stories to show we know what we are doing.
If you get in touch, we will be able to tell you very quickly if we can help or not and what sort of rates you would be looking at.
If you have a DMP and you want a Mortgage, we are confident we can help.