Q I’m 46 and stay in a small two-bedroom home with my two youngsters however I would like one thing greater. I owe about £96,000 on the mortgage but additionally have one other secured mortgage of £38,000 (which is what it could value to repay it so contains early redemption charges and so forth). The home is valued at about £165,000, so I do have some fairness in it. Nevertheless, my actual drawback is that I’m additionally on a debt administration plan of about £13,000, which has been going for lower than a yr. If I bought my home and paid off the whole lot, I’d have £18,000 to place in direction of an even bigger home. However my query is: would I have the ability to get the larger mortgage that I would want?
Is there any hope? I used to be additionally questioning whether or not I ought to promote up and hire for some time earlier than attempting to get one other mortgage. Or has my credit score historical past scuppered any possibilities of shopping for an even bigger place? AM
A Sure there’s a very modest quantity of hope however it’ll contain a little bit of a wait and the usage of a specialist mortgage dealer. In response to Pete Mugleston, of onlinemortgageadvisor.co.uk, “You may get a mortgage with a debt administration plan (DMP) however it very a lot is determined by your private circumstances. One of the necessary issues that lenders will have a look at is whether or not or not the DMP is lively and, if not, how way back it was happy.
“In case you are at present managing money owed as a part of a DMP, then your choices are going to be much more restricted… as nearly all of lenders, particularly excessive road banks, received’t think about an unhappy DMP.”
These lenders that may think about mortgage purposes from folks with lively DMPs will normally require your lively DMP to have been in place for a minimum of 12 months and to have been managed responsibly.
However even for those who wait till your DMP has been in place and well-managed for 12 months, the probability of you getting an even bigger mortgage are slim. That’s as a result of probably the most you would possibly have the ability to borrow is 75% of the worth (not the identical as the acquisition worth) of a brand new property. With a money deposit of £18,000, that may imply a complete property worth of £72,000 with a most mortgage of £54,000. The utmost mortgage could be even smaller if a part of the £18,000 must be used to pay authorized and different charges.
