We originally helped a couple in 2019. At the time the couple had a DMP which had been run fine. It was on course to be paid off soon after completion of the mortgage.
The DMP had been taken out due to running up debt and really just spending more than they could afford. This had then caught up with them and so they entered the DMP.
In addition to that there was also some problems with a business where income had dropped significantly. That also did not help the situation.
We did a 5 year fix, this was due to the fact that affordability was struggling. A 5 year fix can help with that. Also, realistically it was going to take another 3-4 years for the adverse to drop off their credit reports. Those 5 years came to an end recently…
Where are we now?
5 years down the line, the clients got back in touch earlier this year to see if we could help them get a new mortgage.
Their credit reports were much cleaner, the DMP and all associated markers had gone. However they had picked up some minor arrears in the last 18 months or so which made things a little more complicated than we were hoping 5 years ago.
Aside from that, everything else was fine. Their incomes had increased a little the self employed business had levelled off their profit rather than showing big drops.
What we did
As always, we toook a look at the credit reports and obtained an updated factfind. This meant we could have a look at what options we had.
Initially, I thought we were going to be looking at a building society. It is a step in the right direction, but we were hoping after 5 years we would be able to get them back on the high street. As rates had increased over the last few years it also meant despite the improvement rates would still be higher than they were paying.
However, as it was one of those borderline cases, we did a Decision in principle (DIP) as a bit of a punt.
The outcome
Success! The Decision in principle passed on the high street. The upside here is that we had managed to help these customers get through their initial difficult situation 5 years ago. We were also able to guide them back to the high street. This was despite the more recent marks on their credit report.
Rate wise, it was more or less in line with what they had been paying maybe marginally lower. As their household income had increased and childcare costs had decreased they also wanted to knock a couple of years off the mortgage after intially having to extending 5 years ago in order to pass affordability.
Summary
This is one of those great examples where we get to see clients at a really rough time secure what they need and then in time get them back on to the high street.
Assuming everything stays fairly steady they should now be able to remain on the high street and always have reasonable rates. They may not always be market leading but should be competitive compared to where they have been previously.