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Applying for a mortgage soon

edited 30 November -1 at 1:00AM in Mortgages & Endowments
2 replies 414 views
gb-wwgb-ww Forumite
7 Posts
edited 30 November -1 at 1:00AM in Mortgages & Endowments
Hi Guys
I will be applying for a mortgage soon, hopefully within the next three months or so. I earn a good salary and have a deposit saved so not too worried about that.

I am going to check my credit files to make sure there is nothing hidden there but there is no reason for there to be.

I have a car loan that is just over half way through its 48 month period. I have enough saved to enable me to pay off the loan in full now and still leave enough for the deposit. Obviously lenders will be able to offer me a higher mortgage amount if i do this. However my question is, if I spoke to a mortgage adviser in a bank, would the evidence that I had the money saved and would be able to pay off the loan if necessary be enough for them to offer to lend the higher amount anyway? Then I would be able to pay off over the normal period (it is 0%) from my savings, whilst keeping myself a buffer once I had bought a house.

I think my preference would be to just pay it off and get it out of the way but just wondered what people's advice would be?

Replies

  • hostie1985hostie1985 Forumite
    220 Posts
    hi gb-ww,

    the bank may lend you slightly less if you still have a loan to pay - If i was you, i would pay off the loan before getting the mortgage as i would feel better going into buying a house and knowing that i have no other debt to worry about

    hostie

    xx
    Saving for a deposit for a place of my own.....
    :jSavings so far £29,450/£40,000:j 73.6% SAVED!!!
    1poll £23.90/£40.00 (claimed 1x£40)
    No Monthly Car Payments left! Paid off on the 5/11/10!
  • Fairdo_2Fairdo_2 Forumite
    442 Posts
    Hi

    Unless there is confirmation that it is paid off, they would not assume it is paid off when they advance you the money.

    If you say it would be paid off, that would be a condition of your mortgage that you have to and your Solicitor would need to confirm this has been done.

    It is up to you how you go about this, but if it is at 0%, I would consider keeping it going as you won't get a cheaper rate!
    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.
This discussion has been closed.
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