Can I get a mortgage after a Debt Arrangement Scheme (DAS)?

Applying for a mortgage following a DAS

If you have aspirations of buying a home but have recently been in a Debt Arrangement Scheme (DAS), the good news is that getting a mortgage after a DAS is possible. You may even be able to access a mortgage during a Debt Arrangement Scheme, but it’s usually preferable to wait until it’s complete. 

With that in mind, we explore how to apply for a mortgage after a DAS and discuss the steps you’ll need to take to find a competitive deal. 

Why is it difficult to get a mortgage after a Debt Arrangement Scheme?

Formal debt solutions like a DAS are never a quick fix. It can be an effective way of repaying your debts and regaining control of your financial future, but a DAS will stay on your credit file for six years from the time it’s set up, even if your Debt Payment Programme finishes before then.  

A Debt Payment Programme is a core part of the DAS. It is recorded on a public online register maintained by the DAS Administrator. Although the register is public, it’s only published online. That means it’s unlikely that friends, family members or colleagues will see it. However, the credit reference agencies monitor it and will add the DAS to your credit file, which will adversely affect your credit score. 

That can make it very difficult to find a mortgage during a DAS, and any deals you can access will come with higher interest rates. Once the DAS has been removed from your credit record, as long as you take steps to improve your credit score and have a stable income, you should be able to find a competitive mortgage deal.

Rebuild your credit score - Your credit score won’t automatically return to its previous level once the DAS has been removed. You will have to take active steps to improve it. You should regularly check your credit file for errors, pay all bills when they’re due and consider applying for a credit builder card.

Avoid future debt issues - New defaults and missed payments after a DAS will seriously damage your credit. Living within your means and creating an emergency savings fund will mean you don’t have to rely on credit if there’s an unexpected expense. You should also apply for and use any future credit sparingly and cautiously.

Save for a larger deposit - After a DAS, it’s good to have as large a deposit as possible. That reduces the risks for the lender and will give you access to lower mortgage interest rates. It will also reduce the cost of your monthly payments and give you more disposable income. 

Professional Debt Arrangement Scheme advice

If you want to know whether it’s possible to get a mortgage after a Debt Arrangement Scheme or have any other DAS questions, please get in touch for free advice. At Scotland Debt Solutions, we can guide you on the implications of debt solutions such as Trust Deeds and the Debt Arrangement Scheme and explain your options. We also offer free home visits and meetings at our offices throughout Scotland.