Posted on 9 February 2011 by claire
Would I be able to get a mortgage if I'm on a debt management plan? I currently pay rent, but am wanting to buy. We have a combined income of around £24,000 p.a.
A Debt Management plan will exclude you from nearly every Lender at the moment and there are very few deals around. If the arrangement has been running for over 2 years and you have kept it up to date it may be possible, but you would need a joint income of £25,000. This can include any overtime, bonuses or guaranteed salary allowances but not any benefits or Tax Credits.
You will also need to have a substantial deposit of around 25% of the purchase price, with additional funds to help cover legal costs, Stamp Duty and valuation fees.
I recommend that you speak to a local independent mortgage broker about your situation.
Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.