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  • FIRST POST
    • WishIHadAName
    • By WishIHadAName 13th Feb 18, 3:15 PM
    • 2Posts
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    WishIHadAName
    First Mortgage loans
    • #1
    • 13th Feb 18, 3:15 PM
    First Mortgage loans 13th Feb 18 at 3:15 PM
    Hi

    Im looking at buying my first house with a 5% deposit. I know raising a 10% deposit is better but since renting Im just treading water trying to acheive this. My question is how much do loans affect a application? I currently have a loan with £2000 left to pay. I was looking at getting another loan to fund a car for a £1000 giving me a £3000 loan with payinf off the exisitinf one. This would add a year to paying the loan off but on a better rate. I i currently oay £96 a month and to take our a £3000 loan for three years would cost £72 a month. My question is, would it affect a mortgage application having slightly more debt or would paying less a month be better?
Page 1
    • juniordoc
    • By juniordoc 13th Feb 18, 3:30 PM
    • 324 Posts
    • 263 Thanks
    juniordoc
    • #2
    • 13th Feb 18, 3:30 PM
    • #2
    • 13th Feb 18, 3:30 PM
    Depending on how much cash your 5% deposit turns out to be, the loan maybe more or less significant.
    If it's 5% of a 300k house you're probably fine, if it's 5% of an 80k house then you really don't have much deposit once the loan is taken into account.
    • WishIHadAName
    • By WishIHadAName 13th Feb 18, 3:31 PM
    • 2 Posts
    • 0 Thanks
    WishIHadAName
    • #3
    • 13th Feb 18, 3:31 PM
    • #3
    • 13th Feb 18, 3:31 PM
    Well my partner will be supplying the deposit yet Im the bigger earner so will pay more mortgage. We have a £14000 deposit.
    • ACG
    • By ACG 13th Feb 18, 4:33 PM
    • 16,336 Posts
    • 8,443 Thanks
    ACG
    • #4
    • 13th Feb 18, 4:33 PM
    • #4
    • 13th Feb 18, 4:33 PM
    When it comes to loans, most lenders will work off the monthly repayment rather than the balance. So £72 is probably better than £96. However, that is not a hard and fast rule so it might be worth speaking to a broker if affordability is tight.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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