Timing of 2 applications

chelseablue · 20 October 2017 at 3:58PM

I'll try and get to the point

Our 2 year fix rate mortgage is up on 31st March

We currently have a lease car that needs to go back to the dealers in March

So, in March we need to buy a car. Paying around half cash and personal loan for the rest (and paying that off as quick as we can)

Is it better to apply for any finance before the mortgage?
I could apply for the loan in January and keep the money sitting in the bank until needed
Only downside is I'd have a couple of months of paying for both the lease car and loan payment (but more than doable)

Or do mortgage application first?

OR :rotfl: I could put the car on a form of borrowing I already have (Barclaycard)

My credit file is excellent

Thank you

YHM · 20 October 2017 at 4:08PM

Get the mortgage out the way first. You could even start to review that now as some lenders would provide a 6 month offer on their mortgage terms.

The_Leopard · 21 October 2017 at 8:09PM

Chelseablue, do you have enough LTV to put the car on the new mortgage?

Debtslayer · 21 October 2017 at 8:43PM

As YHM said, sort mortgage first.
Please don't consider putting car onto mortgage. Really not a good idea when you have other options that aren't secured debt against your house

AnotherJoe · 21 October 2017 at 10:09PM

Why do you need to buy a car in March ?

zagubov · 21 October 2017 at 10:52PM

Don't put anything onto the mortgage apart from the house. It's potentially a 25-year loan so completely unsuitable for a depreciating asset.

In full-on MSE mode, is buying a car so expensive you'll need a loan for it just at the time you're making your biggest financial commitment really necessary.

The_Leopard · 21 October 2017 at 11:03PM

Debtslayer, surely it's dependent on an individual's circumstances? To consider it and decide not to is one thing but to discount it entirely could be missing out on an opportunity to make your money work more effectively.

For me personally, and this is not advocating it's right for everyone or anyone else, I can borrow enough for a new car, and return a lease car, keep my mortgage term the same, whilst reducing my monthly payment, and have a significantly lower fixed interest rate for five years than I currently have. It's cheaper than a commercial loan and the amount I'm obliged to pay is less per month. I'll use the money saved on the lease car to make overpayments and have the extra borrowing paid off in 2 years and continue to overpay to reduce the overall mortgage term. So my point was really about considering another option but I fully appreciate it has to be in the context of affordability and risk in each individual circumstance.

chelseablue · 23 October 2017 at 8:57AM

LTV is good, house is worth approx. £435,000 and outstanding mortgage is £221,000.

We do have to buy a car in March as our 2 year lease is up then and the car will be going back (must be returned, no option to keep it)

The plan after 2018 is to overpay the mortgage by £500 - £1,000 a month.

Really not sure about borrowing more on the mortgage for a car, would rather see the mortgage balance go down not up. Plus funds wouldn't be realised in time so partner would be car-less and he needs it for his commute.
Although, could get a personal loan and when the re-mortgage completes pay off the loan
But as I said really not sure its a good idea

AnotherJoe · 23 October 2017 at 11:10AM

In the phrase “need to buy a new car”

The words “need”, “buy” and “new” are all incorrect.

He could rent for a couple of months until the mortgage is running
He could lease a s/h car.
He could buy a s/h car

chelseablue · 23 October 2017 at 11:14AM

When I say new I mean new to us not a brand new car

Will be about 5 years old

Its probably really obvious but what does s/h mean?

YHM · 23 October 2017 at 11:19AM

Secondhand

Timing of 2 applications

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