Your views and questions.

Moderators: TalbotWoods, JaneClack

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By JaneClack
#454863 As Tim says it is unlikely you would get a mortgage in the current climate - but of course it depends on what percentage £20,000 would be of any new property you were thinking of buying. The higher the deposit to the value of the house - and probably a higher interest rate than you would get on the open market then it might be possible. The sting in the tail though is that when mortgage companies credit check you they would want to see how much other borrowing you have and this as you know is high. You would not be able to remortgage due to this so staying in the property and trying to do this is not going to work.

If you were to sell then you could look at full and final offers through Payplan or you could look at a lump sum IVA - both of these will sit on your credit file for 6 years which will again predicate against an early mortgage. You could get a better deal on an IVA as creditors traditionally want more in full and final settlements - there are so many permutations here though that you are far better discussing this with your case officer. Salary is a factor, stability of job is another, age can be a factor, type of mortgage can be a factor - is the property leasehold, is it co-owned with a housing association? All these things have to be taken into account - so the bottom line is speak to those who have all the facts. It is in Payplan's interests to give you the best options but if they do not know their hands are tied.

Let us know how you get on.
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By TalbotWoods
#455013 OK playing devils advocate here:

I am a mortgage lender, you come to me for a mortgage, I look at your CRFs, I see a reduced repayment DMP, defaults, past issues. Do I want to risk giving you high level debt when there are issues with low level debt, or to I tell you go go find a sub-prime lender that may give you a mortgage at a horrendous rate. I think I would be saying go sub-prime as there are many people with good records I can provide a mortgage to.

I am your creditor/DCA on your DMP, you come to me with a Full and Final, tempting, but you are in a good job, you have property, you are paying well. I think I will say no for now as this is a good quality risk as you give them some income each month.

I am your creditor/DCA on your DMP, you come to me with an lump sum IVA. Oh now that is tempting as if I dont jump, then I may have it enforced on me by the IVA itself. Some of the others are accepting much lower offers, I have to do the same. OK I'll go for this before I loose out oddles of money. This is very doable!

You move out, sell the property and go into rented. Your income increases as you are now only paying rent not the higher mortgage, therefore you can pay down your DMP quicker, a couple of the DCAs accept a Full and Final on the DMP, the others dont, but you still end up paying more than now as your excess is more. Cant get a mortgate as the DCAs are still screwing your CRF up for years to come.

You move out, sell the property and go into rented. You offer the equity as a lump sum IVA, they accept, so all excess you earn each month is now yours, which means you can live again, and more importantly save again. ALL adverse credit is gone form your CRF, you can rebuild again. I six years you can get a decent mortgage (assuming that the property market hasn't collapsed again).

I cannot tell you which route to go, I can only suggest consequences of each route, but looking though this lot there seems to be a good route that may well work well, and end the misery quite quickly.
User avatar
By TalbotWoods
#455043 I cannot say which is the right way or the wrong for you to go, as I do not know all you individual circumstances, that is what a case officer is for. Sorry if that sound a bit uncaring, but I cannot give advice without all the pertinent details.

You have raised two further considerations:

:arrow: "if mortgage rate rise I am stuffed", interests are going to go up, and as the Governor of the Bank of England said last week, people taking mortgages now should think very carefully if they can afford the same mortgage WHEN the interest rates go up. If not then they should consider not taking a mortgage!

:arrow: "if I get another huge service charge bill" No one can answer this except the management company, only they know what they are planning or what issue may come up that reulst sin a massive charge being levied.

OK I am DELIBERATELY moving this away from what if type questions about property, and ask a simple direct question.

In six years time (or about) do you want to still be asking how to pay your creditors off, or do you want to be debt free.

Sometimes the best and easiest solution is not always the most comfort one.
User avatar
By JaneClack
#455703 You also asked whether you had to give all the proceeds of the sale to the creditors which is precisely why I suggested looking into a lunmp sum IVA as you make the offer after getting another place etc.

Please speak to your case officer as soon as possible - Payplan also have a special team who look into situations such as yours and they are best placed to discuss it.