Remortgage with Debt Management Plan

Q: Can I Get A Credit Card While On A Debt Management Plan?

You can get a credit card while on a DMP, but it is advisable that you do not take any more debts for the time being and don’t slow down the process of you paying your debts back to your creditors. This will just increase the size of your actual loan. Adding more to it doesn’t help at all.

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

Are you thinking about getting a second mortgage while you have a Debt Management Plan (DMP)? You might be worried about how your DMP could affect your chances. But don’t fret; help is at hand.

Each month, over 170,000 people turn to us for guidance on debt solutions. Many of them, just like you, are dealing with a DMP and considering a second mortgage, so you’re not alone on this journey.

In this guide, we’ll walk you through:

What a Debt Management Plan is.
Steps to take if you’re feeling worried.
How having a DMP might affect getting a mortgage.
The process of getting a remortgage with a DMP.
Why it might be harder to get a mortgage with a DMP.

We understand the challenges you’re facing, as some of us have been in your shoes, dealing with a DMP and looking into remortgaging options. We’ll use our knowledge and experience to help you understand your options.

Let’s tackle this together and help you make the best choice for your financial future.

Remortgaging On A Debt Management Plan

Remortgage while on a DMP is less tricky.

With a mortgage, people are usually allowed to take loans of an amount worth 95% of their property. However, this amount is reduced if you are on a DMP.

Moreover, if you want to consolidate debt on a mortgage, you will not be able to release as much equity as you could without the DMP.

When taking a remortgage against the same property, your lender won’t give you any leverage when it comes to accepting your loan application. He will most probably reconsider and check your credit history again before deciding whether he wants to lend you another mortgage or not.

Also, your ability of debt consolidation in the mortgage will diminish. This is because while on a DMP, you probably won’t get a mortgage worth more than 85% of the value of your house. Any more than that and the creditor would probably refuse credit.

Learn about debt solutions

Why It Is Harder To Get Mortgage On A Debt Management Plan

It’s harder as your lender will probably see your credit history before giving you a mortgage. If your expenses show that you’re probably going to have a hard time paying your monthly mortgage payments, you won’t get a mortgage.

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Are there any other options?

Deciding how to tackle your debt is a very personal decision and you certainly can’t get the answer through a simple blog post.
It’s made worse by the strong opinions you’ll often find online.

The best option is to get help from a debt expert to find out all your options and see which is right for you.

I’ve partnered with The Debt Advice Service and you can access their expert support by filling out the short form below.

Get help from The Debt Advice Service.

How a debt solution could help

Some debt solutions can:

Stop nasty calls from creditors
Freeze interest and charges
Reduce your monthly payments

A few debt solutions can even result in writing off some of your debt.

Here’s an example:

Situation

Monthly income	£2,504
Monthly expenses	£2,345
Total debt	£32,049

Monthly debt repayments

Before	£587
After	£158

£429 reduction in monthly payments

If you want to learn what debt solutions are available to you, click the button below to get started.

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Afterword

DMPs are a convenient way to pay off your dues at a lower interest rate.

However, make sure you’re getting a professional DMP practitioner who can manage your debts efficiently and can advise you as well.

Your choice of a DMP practitioner is important in deciding how much money you will be paying back to your lenders.

If you want any additional help or guidance, feel free to contact us. we’ll be happy to help.

Good luck!

Thousands have already tackled their debt

Every day our partners, The Debt Advice Service, help people find out whether they can lower their repayments and finally tackle or write off some of their debt.

I’d recommend this firm to anyone struggling with debt – my mind has been put to rest, all is getting sorted.

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Frequently Asked Questions (FAQs)

How Long Will A Debt Management Plan Stay On Your Credit File?

A DMP will stay on your credit file for six years. After that, it will be erased like other debts that you’ve taken.

Will I Still Get A Mortgage With A Debt Management Plan?

Yes, you can still get a mortgage with a DMP. However, the percentage of the value of your house that you’re allowed to take on loan will fall. For example, the government has regulated that you can take a mortgage of up to 95% of the market value of your house. If you’re on a DMP, this percentage might fall down and give your less credit.

Do I Have To Include All Debts In A Debt Management Plan?

No, only non-priority debts are to be included in a DMP. The priority debts usually have their monthly payments scheduled on priority. That means that you first have to pay high priority debts, then you can work on paying off your DMP.

Can I Get A Credit Card While On A Debt Management Plan?

You can get a credit card while on a DMP, but it is advisable that you do not take any more debts for the time being and don’t slow down the process of you paying your debts back to your creditors. This will just increase the size of your actual loan. Adding more to it doesn’t help at all.

Are Debt Management Plans a Good Idea?

If you have a bad credit history, a DMP will most probably do you good. When it comes to debts, anything is better than going bankrupt or going to court over debt and having your assets seized. If you have a hard time in paying your low priority debts, you can get a DMP. Just make sure that your DMP practitioner is qualified to manage your finances accordingly and can advise you in debt problems.