A report by debt charity and Debt Management Plan (DMP) provider, StepChange, stated that 326,897 new clients contacted them for help with debt between January and June 2018.
Personal debt in the UK also increased to £1.58 trillion by the end of April 2018, compared to £1.53 trillion during the same period in 2017 according to The Money Charity.
So what could this mean for you?
With a rise in debt in the UK, the number of people seeking support from DMP companies could also increase.
When it comes to mortgages, you may not always be able to see whether your client is, or was, in a DMP. This is because DMP providers don't always register the DMP on their clients' credit file.
As a broker, it's important to select the most appropriate mortgage for your client based on their financial situation. But how can you do this if your client's DMP hasn't been registered?
Is your client in a DMP?
Here are a few steps you could take to identify whether or not your client is, or was, in a DMP:
- When looking at your client's bank statements, see if there are any regular Direct Debits or standing orders to a DMP provider
- If you spot a pattern of regular payments to a company you don't recognise, a quick internet search could help find out whether it's a DMP provider
- Establish how long the plan has been in place and whether regular payments have successfully been made to the DMP company.
Having a client who is, or was, in a DMP doesn't necessarily mean they may not be able to get a mortgage. There are lenders that provide mortgages in this situation providing that regular payments have been met.
If your client is or has been in a DMP, we may be able to help. Check out our Residential DMP product range.