We try to answer any of the questions you may have about our Debt Management Plan (DMP) range. If you have a question that isn't answered, please get in touch.
What is a DMP?
A DMP is a non-binding agreement between an individual and their creditors to repay debts. The DMP provider works out what the individual can afford to pay and negotiates with their creditors to agree on a payment plan. Once this is agreed the individual makes the payments to the DMP provider, who pays this money to the creditors as agreed.
You can learn more about DMPs in our article, Debt Management Plans Explained.
How can I spot a client in a DMP?
Not all DMP providers register DMPs on their clients' credit file so it's not always as straightforward to see whether your client has been in one. Our How to spot whether your client is in a Debt Management Plan article gives you a few handy tips.
How long does my client need to be in an active DMP before they can apply for a mortgage with you?
A DMP needs to have been active for at least 12 months before we can consider an application. Your client must also provide proof of satisfactory payments from the DMP provider.
My client has satisfied their DMP. Can they apply for a mortgage with you?
If your client was in the DMP for at least 12 months and can provide proof of satisfactory payments from the DMP provider then they should be eligible for our DMP range. If the DMP was satisfied over 12 months ago they may be eligible for our core range of products.
- Can my client have had any CCJs or defaults since the DMP was registered?
My client's credit record shows more than one active DMP, will you consider this?
Your client must not have more than one active DMP in place. If you're able to clearly demonstrate that these creditors are a part of the same DMP, we'll be able to consider the application. If you're unable to provide this evidence we won't be able to proceed with the case.
What should I do if a client's credit profile incorrectly shows a DMP?
Unfortunately, there are times where a creditor may have mistakenly registered a DMP on an individual's credit record. This needs to be removed from their profile before we can consider their case.
How many active DMPs can my client have and still be eligible for a mortgage with you?
We'll only consider cases with one active DMP. This means that if a couple make a joint application and both are in separate DMPs, we won't be able to consider their case.
What happens if my client has stopped making their DMP payments or chooses to pay their creditors directly?
If your client has chosen to stop making payments to a debt management company while they're in a plan, we won't be able to confirm that it's been conducted satisfactorily, and so we can't lend to them.
The exception to this is if the debt management company has ceased trading - we'll consider these on a case-by-case basis.
What happens if my client moves from one debt management provider to another?
This shouldn't be a problem, as long as there has been no break in payments on the DMP and you can supply references from all providers covering the last 12 months.
How is affordability calculated for the DMP range?
Affordability is calculated by taking account of the contractual payments as outgoings in the Commitments section of our application portal. Please include those covered by the DMP here. If the DMP will be repaid before completion of the mortgage, please mark these payments as "to be repaid".
Does a DMP have to be satisfied before the funds will be released?
No, we'll consider the DMP as a monthly commitment when we assess affordability.
Submitting a case
Will my client always know that they're in a DMP?
Your client should be aware that they're in a DMP as they arrange it through a debt management company. If they're not aware, but their credit record has one registered in their name, it's possible a creditor has registered it in error.
Find out some helpful tips on How to spot whether your client is in a Debt Management Plan.
What products are available to individuals who are or have been in a DMP?
We currently offer a Residential DMP product range for purchases and remortgages.
Individuals in an active DMP or one which has been satisfied in the last 12 months won't be considered for either our standard Residential or any of our Buy to Let products.
Will I need to provide a reference or proof of payments for DMPs that have been satisfied?
Yes, we require proof of payments for active DMPs and those satisfied in the last 12 months.
Proof of payments will not be needed for DMPs satisfied over 12 months ago.
Do you require any additional information to be submitted for a DMP case?
Yes, when submitting the case on to our application portal, you'll need to confirm if your client is in an active DMP on the Loan Details screen to make sure you see the right products.
Also, please include all the contractual payments, including those covered by the DMP, in the Commitments section as you would in a standard application. If the DMP will be satisfied on completion, mark them as "to be repaid".
If your client has satisfied their DMP in the last 12 months then this will be picked up during the soft credit search and the DMP range will be presented.
In addition to the above, we'll need the following documents to be uploaded to the application:
- A completed DMP Supplementary Information Sheet - this is a breakdown of the creditors covered by the DMP (only required for active DMPs)
- A reference letter from the clients' DMP provider on their headed paper (required for active DMPs and those that have been satisfied in the last 12 months).
We've included a template for the letter to send to the DMP provider with the DMP Supplementary Information Sheet download.