DMP Mortgages

A DMP is an informal agreement between yourself and your creditors to allow you to make manageable payments to clear debt. With a Debt Management Plan (DMP) a repayment plan is agreed that allows debtors to pay off their debts to creditors over a period of time. The plan is administered by a credit counselling agency and typically involves the consumer making a single (often monthly) payment to the agency, which is then distributed to the creditors. The plan may also involve lowering the interest rates and negotiating lower payments with the creditors. In some cases, the debtor may also be able to have late payments and other fees waived.

Receiving a mortgage with debt management plan is difficult but not impossible. We work with mortgage lenders who will lend to you whilst still in your DMP. If you are able to demonstrate that you are managing your debts responsibly, some lenders may be willing to consider you for debt management mortgages. Leave it to ams: and we will find a lender meeting your needs.

A debt management plan is likely to have an impact on a debtors chance of securing suitable mortgage terms. The fixed monthly payments towards non-priority debts decrease the amount of their disposable income, making it harder for lenders to consider them for a mortgage.

Additionally, a 'flag' may be added to the debtor's credit report indicating that they are on a debt management plan, which could make it difficult for them to obtain a mortgage. Speak to ams: we overcome these problems by having access to lenders providing debt management mortgages.

Yes, you can remortgage with a debt management plan. However, this may be difficult as many lenders are hesitant to provide mortgages to people who have a debt management plan in place. Speak to our experienced brokers at ams: who will discuss your options to obtain a remortgage with a debt management plan.

It may never show on your file as a debt management plan. The length of time a DMP stays on your credit file depends on the agreement you have with your debt management company. However, any arrears/defaults that may occur off the back of your debt management plan will stay on there for up to 6 years.

A high Debt-to-Income (DTI) ratio typically indicates that an individual has too much debt relative to their income. This leads to some mortgage applications being rejected because lenders see the borrower as being unable to reliably make their mortgage payments. Furthermore, a high DTI ratio can signal that the borrower has too much financial stress, making them at significantly higher risk for defaulting on their loan.

Both DMPs and IVAs can help you pay off your debts, but there are some key differences between them. The main difference between an IVA and a DMP is that an IVA is a formal legal agreement, whereas a DMP is not.

DMPs are generally more suitable for people with smaller levels of debt, whereas IVAs are better suited to those with larger amounts of debt. DMPs are more flexible, as you can adjust the payments you make according to your financial circumstances. IVAs, however, are generally more structured, with predetermined payments over a fixed period.

Whether you have a DMP or an IVA, here at ams: we can help you get a mortgage, so why not contact us today?