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Impact of Debt Management Plan on Mortgage

Posted on 10 July 2011 by John


In the not too distant future I will be in a position where I will need to raise £14.000 in order to purchase a property with a value of £140,000 A very good deal I know.  However, if for instance I were to enter into a debt management plan before I have to raise the £14,000 would I still be able to get a mortgage or finance?

John

Although the amount you wish to raise is very small, I think that a debt management plan would effectively prevent you from getting a mortgage.  All Lenders, even those who rely on good old fashioned underwriting, will carry out a credit search and this would reveal the existence of the management plan.  If you have already missed credit payments or you have not been paying the full amount due each month it is possible that your credit report will already be tarnished enough to put lenders off.

I recommend that you get a copy of your credit report from one of the major Credit Reference agencies: Experian, Equifax or Callcredit.  The maximum cost to see your statutory report is £2 and you can view it online or get a copy by post.  You should then speak to a local independent mortgage advisor about your situation and the options available to you.

Peter

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.


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