Debt Management Remortgage
Getting the best debt management remortgage
After helping numerous people obtain a debt management remortgage we thought it would be a good idea to put together some hints and tips to help people get a quicker decision and faster completion when re-mortgaging out of debt management. From experience we know that the majority of people on debt management are more than happy with the way their debts are being managed - however for homeowners there may come a time when they can repay their debt management plan in full by way of a debt management remortgage.
What can a debt management remortgage do for me?
Put simply a debt management remortgage will allow a homeowner to apply and complete on a remortgage application whilst they are on a debt management plan - more specifically a debt management remortgage may allow you to consolidate your debt management plan into 
your new remortgage thereby repaying all your debts in full and put you on the right track to repairing your credit and your credit rating which will mean you should benefit from better interest rates and lower fees for future remortgage applications.
A debt management remortgage may also save you money, although you will be paying interest on the debts you repay with the remortgage, you should be able to apply for what is called a 'full and final' or 'short settlement' figures which could reduce the total amount of debt you repay with the new remortgage - so whilst on first glance it may seem you do not have enough equity in your property when short settlements are taken into consideration you may find you are able to remortgage out of debt management.
How do I know if I can apply for a debt management remortgage?
For people on debt management obtaining further credit is usually the last thing on their minds. For homeowners and mortgage payers it is very likely they will need to obtain further credit by way of a remortgage at some stage whilst they are on the debt management plan. Being on a debt management plan will not stop people applying and completing a remortgage application - it will however require the knowledge of a mortgage broker who understands both debt management and the adverse credit mortgage market to ensure the best deal is offered to the client wanting to remortgage and repay their bad debt. If you are a homeowner and have equity in your property you may be able to apply for a debt management remortgage.
Is a debt management remortgage right for me?
This question is probably asked by anyone on a debt management plan who qualifies for a remortgage and is considering a debt management remortgage. There is no simple answer to this as everyone's circumstances, needs and preferences are different but in general terms - if it is important to you to fully repay your bad debt and improve your credit rating by repaying your debt management plan (which will mean you will get better mortgage interest rates in the future) then a debt management remortgage may be right for you. Before you apply for a new remortgage its best to speak to a specialist broker who understands both markets so they can evaluate whether it would be best to stay as you are or remortgage and repay your debt management. If they know what they are doing they should be able to put all the facts and figures in front of you so you can make an informed decision.
Speed up the application for a debt management remortgage
When people apply for remortgage's, or mortgages for that matter one of the biggest obstacles mortgage brokers face if getting the right information together for the lender in order to get the application to complete as quick as possible. If a person is on a debt management plan it is very likely some form of adverse credit will be listed on their credit file which makes getting the documentation right first time even more important.
There are obviously certain things you will need when applying for any remortgage such as ID and proof of resident etc. For a debt management remortgage you will also need to supply a copy of your monthly debt management statement which should show how much you pay to your creditors on a monthly basis, the amount owed to each creditor and the total amount being managed by the debt management company. You should also get a copy of your credit report and match up the debt on you credit file with the ones being managed so the lender can see which loans etc have new payment arrangements - this will help the lender work out the correct affordability calculations as they will work off the debt management statement and not your credit file.
Use a debt management remortgage broker
If you are looking to remortgage away from debt management it is far more likely you will get better results from an adverse credit remortgage specialist who also understands the debt management industry and how debt management plans work as they will be able to explain to the lender exactly what it is you are wanting to do. We have spoke to some clients who have had previous mortgage applications get knocked back by a lender due to the mortgage broker not knowing the correct way to explain your requirements to the new lender.
A specialist debt management remortgage broker should also be able to help with any short settlements or reduced settlement figures to ensure that you clear as much as possible from the remortgage funds - you may find that a specialist debt management broker could liaise with your creditors or your debt management company to ensure the funds you have available will be enough to clear the debt management plan - at the very least they will be more familiar with your circumstances and have a better understanding of what you are wanting to achieve.
Manage your expectations
This may sound like a strange thing to mention but its important you understand what any new payments etc will mean to your monthly living costs. If you repay your debt management plan then you will obviously no longer be paying that each month but it may be that your mortgage payments increase due to any adverse credit listed on your credit file, whilst most people expect this and are normally no worse off on a monthly basis due to the debt management payments no longer being paid its important to be realistic with the figures. Whilst the payments may increase it is more than likely they will reduce substantially when you next remortgage.
For instance if you get a 2 year fixed debt management remortgage then after the 2 years have ended you should be able to remortgage without any penalties on a far better rate as you will no longer have bad debt registered on your credit file and the 2 year fixed deal will normally give enough time for the new lenders to ignore the previously repaid adverse credit listed. It may also be the case that you are unable to clear all your debt management. In these circumstances you should way up all your options carefully before making any decision. For instance if you can repay all but one debt, and that one debt will be repaid within 12 months it may be worth while doing.
