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Get a mortgage on debt management
Debt management plans are a great way for people who are struggling to meet their normal credit commitments to reduce their monthly creditor payments. It allows your creditor payments to be wrapped up into one single payment without increasing your debt by consolidating them into another loan.
For those entering into debt management, whilst there are many plus points there are a few downsides. One of the main downsides to debt management is that it will usually have an adverse effect on your credit which can affect future loan applications such as mortgage or remortgage applications.
How can a debt management plan effect my credit?
A debt management plan will adjust your existing creditor payments to something more inline with what you can afford - in order to do this they will have to negotiate a new payment schedule with each of your creditors which usually means the creditor defaulting the original credit 
agreement prior to setting up the new payments. There is no legal reason for defaulting the credit account, its upto to the individual creditor but most lenders and creditors will do so to show other companies you may want to borrow from that you were struggling with the payments.
For the vast majority of people entering into a debt management plan this is not a problem as they would have miss payments anyway - if they could afford the normal payments they wouldn't need debt management.
Any missed payments and defaults registered on your credit file will obviously affect any loan applications and mortgage's are no different.
Will I still be eligible for a mortgage whilst on debt management?
In a word yes. There is no reason why a debt management should stop you applying for and getting a mortgage however it is likely you will have to apply to a lender that allows adverse credit such as missed payments and defaults to be registered on your credit file - its unlikely you would fit into a high street lenders underwriting criteria if defaults are registered.
The term for mortgage lenders that allow missed payments, defaults and debt management plans are normally called 'sub prime' or 'adverse credit' lenders.
Most adverse credit lenders will have pretty much the same sort of deals available through the high street such as fixed, discounted and tracker rates etc but will normally have slightly higher interest rates than a high street lender to reflect the potential greater risk associated with people who have suffered bad credit.
In order to apply to an adverse lender you will normally have to speak to a mortgage broker as they don't tend to deal directly with the public. There are lots of specialist mortgage brokers around who work solely in the adverse market and are more than able to help with mortgage applications for people on debt management.
One of the main differences for people on debt management who apply for mortgages is that, instead of a lender working from your credit report to evaluate your monthly payments to your creditors, they will normally allow you to submit a debt management statement which they can then work off to reflect the lower payments being made. This can often help with mortgage affordability due to the lower payments being made on debt management plan opposed to what you would normally pay in the original creditor agreement.
