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Will Debt Management Affect My Mortgage?

By 27th April 2018Real Questions

Will Debt Management Affect My Mortgage?

One of our advisers was recently asked, ‘If I apply for debt management, will my mortgage be affected?‘, and going on the theory that if one person asks, many more are thinking about it, I thought I’d explore this question more in depth.

Debt Management and Mortgages

As payments to your mortgage (or rent) are considered a priority debt, these costs are factored into your outgoings before our advisers work out how much you can realistically afford to pay towards your debt management plan. We always ensure that mortgage or rent payments are covered, as the consequences for not paying these can be catastrophic.

What If I Own My Own Home?

If you fully own your home then a debt management plan will have absolutely no affect on it directly…however, a DMP can’t stop your creditors taking court action, which could have an impact on your home. Although this is extremely rare and our advisers will do everything they can to avoid this course of action.

Can I Get A New Mortgage on Debt Management?

To be honest, if you are on a debt management plan and are looking to get a mortgage, you are likely to find it difficult (and this goes for all kinds of credit). However, if you are struggling with debt, you will also struggle, and a debt management plan will help you repay those debts quicker, and therefore the sooner you will be in a position to get credit.