Monthly outgoings on mortgage application

thescouselander

The time has come to renew my mortgaage deal. Given the tight market conditions I want the application to look as good a possible. When declaring my monthly outgoings I have a car loan (£200 per month) and my student loan (£123 per month).

My student loan is nearing its end with only 8 months left. I have been considering borrowing some money of my parents to reduce the monthly outgoings I have to declare - I would still pay them back but they are felxible on repayment terms.

Would this be worth doing or would the bank be not too concerned about my student loan payment?

count_rostov

When I got my first mortgage at the end of 2006 the broker told me that banks don't count student loans. However, that was obviously when it was really easy to get credit. I would be really interested to hear other MSEers views on this, because surely a high student loan repayment affects how much you can pay each month, even if the debt itself is low interest?

happybroker

Banks do take student loans into account, as would any right thinking broker when assessing your ability to repay a mortgage.

what's the loan amount, valuation and income?

do you have a clear credit history?

thescouselander

I have a top notch credit history according to the last report I got. The loan amount is £160K with a valuation of around £185K joint income with my OH is £53k.

happybroker

I don't see that you would have too much of a problem. The "quality" of your application wouldn't be affected by the fact you have these loans, in fact active credit that is well maintained will help your cause if anything.

The 86% ltv will mean the very best deals are not going to be available to you but with plenty of research or a decent whole of market broker you should do ok.

good luck

thescouselander

Thanks. I ahave already spoken to our broker but the best deal I think I've spotted is the HSBC mortgage special tracker which is BOE base rate + 0.79%

I like the look of this because there is no tie-in period and the rate lasts the term of the mortgage.

My main concern is that if I get a 2-5 year deal and house prices drop too much then it could make it tricky to re-new next time. At least with the HSBC deal I can keep it long term or if things improve I'm not tied in and I can change if i want.