Could a car on HP affect my chances of getting a mortgage?

audioblackout

Hi guys,

I went into Halifax about a year ago to ask for 60,000 for a house extension. In the end I didn't go for it and decided to wait. But at the meeting, they pulled up my credit report and mentioned that an outstanding HP debt of 6000 for my car MIGHT affect their decision.

Now my HP is paid off, it's time to get another car, again on HP. The car will be around £20000 and this will show on my credit report. I'm thinking if they thought £6000 was going to an issue, then £20000 definitely will!

Have you guys heard of this being a problem before in getting a mortgage??

If so, how would I get round it? I need a new car for my business. Would you guys recommend perhaps going limited to combat the problem? I have never really looked into this before - do any of you guys have some good reading material or advice????

All feedback MASSIVELY appreciated

Batchy

affordability will effect it... monthly payments...

Not overall cost, so 200 spent on a monthly commitment on a car reduces your monthly mortgage affordability by 200 if you didn't have it in the first place...!

Idea

Get the mortgage first, THEN, get the car on HP...

audioblackout

thanks so much for your reply

do you know if i can apply for a mortgage, get it and leave the cash dormant in the bank in anticipation of a house extension next year? would they make me pay the monthly payments on it, even though i haven't taken it out and actually used it???

Trying_to_be_good

Yes, you will have to pay interest unless it's an offset mortgage - you have the money, they've had to get the money to give you, therefore you pay the interest. Makes offset appealling!

Unless they'll let you have it on a drawdown basis, but not seen anything like that for a while.

dwsjarcmcd

Your situation is perfectly normal and has been said it is only the affordability that is affected, nothing else.
You say that you need the car for business, if your employed do you get a car allowance from your employer and if so, do you include the monthly amount in the income you declare to the Halifax?