A mortgage with a debt management plan.
A DMP does not rule you out on its own. Lenders look past the plan to the accounts underneath it: what was marked, and when. That is where the real answer is.
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David Bourne
What a DMP is, and is not
A debt management plan is an agreement to pay your unsecured debts, usually at a reduced monthly amount, either arranged with creditors yourself or through a provider. GOV.UK is clear about two things people often miss: creditors do not have to agree to it, and unless the agreement says otherwise they can still ask for the full debt later. It is informal, not insolvency, and that matters to lenders.
The plan is rarely the problem. The markers are.
A DMP does not usually appear on your file as one entry. What shows is what happened to each account: arrears, an arrangement to pay, often a default. Lenders date the case from those entries. A plan started years ago on accounts that defaulted at the start reads very differently from a new plan on defaults registered last year.
Still paying, or settled?
Still paying: a smaller group of lenders will consider it, typically where the plan has run without a missed payment for a good while and the monthly payment is counted as a commitment in the affordability sums. That payment can reduce what you can borrow by more than people expect.
Settled or finished: the field widens. Have proof the balances are cleared, and know the dates of any defaults, because those dates decide which lenders are open to you.
Whether to settle early to improve your chances is a debt decision as much as a mortgage one. Take free advice on it before you take mine.
Two things to get before you apply
A statement from your plan provider showing every payment made. And a copy of your credit report from all three agencies, so we can see exactly what each creditor recorded and when. Those two pages are usually the difference between an approximate answer and a real one.
If you are paying a fee for your plan
GOV.UK notes that some providers charge set-up and handling fees. Free plans are available through debt charities such as StepChange and PayPlan, and MoneyHelper can point you to free debt advice. That has nothing to do with your mortgage. It is just worth knowing.
The usual questions
Can I get a mortgage while on a DMP?
Sometimes. Fewer lenders will consider a live plan, and they usually want a clean payment record in it and count the payment against affordability.
Does a DMP show on my credit file?
Usually not as a single entry. What shows is how each account was marked, such as arrears, arrangements or defaults.
Should I pay it off before applying?
Take free debt advice on that first. I can tell you how each position reads to a lender.
Should I mention the plan if it is not on my file?
Yes. Bank statements show the payments, and it is far better declared than discovered.
Leave your details and I will get back to you.
Plenty of people would rather not ring a stranger about their credit file, least of all at the end of a long day. Leave a number or an email and I will get in touch when it suits you.
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Does one of these describe your situation?
What happened, how long ago, and whether it is settled decides more than almost anything else.
How long it stays on your file
Six years is the famous answer. It is rarely the date that actually decides your options.
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Back to mortgages with adverse credit · The broker people ring after being declined
If you would rather see someone local: I work in Uxbridge and I live in Guildford.