Getting a Mortgage with a Debt Management plan (DMP) in itself is not a deal breaker. However the devil is very much in the detail.
We have to consider a number of things:
- Length of time in the DMP
- Number of creditors/accounts in the DMP
- The LTV
There are also other lesser factors that can come into plan. Interestingly we found out a few years ago that most lenders do not accept 2 DMPs on an application, if you were a couple and both entered a DMP for instance that would rule out far more lenders than if just one of you had entered the DMP.
Conduct of accounts since taking out the DMP, in addition to conduct of the DMP and general criteria that all applications will go through.
How long have you been in the DMP?
When it comes to DMPs you will typically fall into one of 2 categories:
Under 6 years,
Over 6 years.
If under 6 years, typically there would be a lot more issues showing on your credit report. This would typically mean you need a specialist lender – that could be an adverse lender or a building society, but realistically it would mean higher interest rates.
If over 6 years, then there is a good chance we should be able to get you normal rates. But again it will come down to the details and some of the things we go into below.
The number of accounts in the DMP play a part too
The more companies and accounts you have in the DMP, the bigger hit your credit report is likely to take. Some lenders will take into account not just the DMP but the number of Defaults you have also, that can mean if you have 2 Defaults or 10 Defaults, your options vary even if the DMP started on the same date.
Although I mentioned earlier that if the DMP started over 6 years ago you may be more likely to get normal rates. That is due to the questions asked and the evidence required by some lenders. If those companies were involved in the DMP then it may mean we do not have those companies available and so you are still limited to the specialist lenders.
The LTV will affect your options
This is in a more obvious way I suppose. The Loan to Value (LTV which is the mortgage as a percentage of the property value) can affect your options. If you are looking for 90% LTV then you are relying on less issues showing on your credit report and/or the DMP having been running for a while. At 75% LTV for example you may find it easier to get a mortgage with a more recent DMP.
How long the DMP need to have been running to get a Mortgage?
We have access to mortgage lenders who can consider a DMP that has been running for a day. However typically most mortgage lenders would need to DMP to have been in place and paid on time for a minimum of 12 months.
Again, the longer it has been running the more options you will have but this typically falls into less than 12 months, 12 -60 months, over 60 months.
Can you get a mortgage with a DMP in 2024?
In short the answer is yes.
You need somewhere between 10-25% Deposit depending on the details.
Rates may be higher if the DMP has been in place for less than 6 years (but only if your credit report reflects the DMP).
Everything else just effects the rates and products. If you would like to discuss your personal options please do get in touch. We would be happy to run through it with you.
It may also be worthwhile speaking to Stepchange/Credit fix or whoever is managing the DMP to get a statement with the creditors on there (if you do not already have one). The companies on there may affect your options.