Mortgage Approved With an Active Debt Management Plan
A case study showing how a home mover secured a mortgage while in an active Debt Management Plan, with historic missed payments.
- Publication date
- Case ID:
- 66125024
Question:
"Can I get a mortgage if I'm in a Debt Management Plan and have had missed payments in the past?"
Customer situation
Single applicant
Home mover
Permanently employed, with child-related benefits
Around 25% deposit, coming from the sale of a previous property
Standard residential property
An active Debt Management Plan (DMP) covering all unsecured debts
Historic periods of missed payments and arrears on unsecured lending
DMP was being maintained and paid on time
Why This Wasn't Straightforward
Being in an active DMP limits lender choice, particularly where missed payments appear within recent years. Some lenders automatically decline applications with a current DMP, while others apply tighter affordability and loan-to-value restrictions.
The Outcome
Mortgage approved.
A specialist lender was willing to consider the wider picture, including the customer's strong deposit position, stable employment, and evidence that debts were being managed and repaid through the DMP. The application was assessed using manual underwriting rather than automated credit scoring alone.
Key points
- Loan-to-value
- 75%
- Mortgage term
- 30 years
- Lender type
- Specialist lender with a more flexible approach to managed adverse credit
- Mortgage Adviser
- Alex Wright
Who This May
Be Relevant For
Applicants applying for a mortgage while in a Debt Management Plan (DMP)
Buyers worried an active DMP automatically rules out a mortgage
Home movers declined for a mortgage due to a current DMP
Applicants unsure whether lenders will consider a mortgage alongside an active DMP
Plain-English Summary
This case shows that being in a DMP does not automatically rule out a mortgage. Where debts are being managed and repayments are being maintained, some lenders are still willing to take a balanced view.