Some advice please...

dbchud

Hi,

I need to start thinking about getting a mortgage. First time buyer, haven't met with an advisor yet but guess I need to. Would like to get some rough ideas as to what options I may have.

I'm 26, living with parents in Exeter. I work in Bristol, although work away (mostly outside of the UK) for 50-60% of the time. When based in the UK I usually travel from Exeter to Bristol on a daily basis.

I currently earn £25,000, have a car loan which has about £2k remaining, and a bank loan with about £6k remaining - total repayments of c£400 p/m.

I realise that these loans will screw me over when applying for a mortgage.

My main question is... would it pe possible to incorporate these loans with the mortgage, i.e to get a mortage for £110,000 (or whatever I can get inc. deposit), which would pay off the car & bank loan? So I basically have 1 loan for 3 products...

Even with my bank loan it seems I could get a reasonable mortgage for a small flat or something, but really need to clear down the car loan. Haven't got enough savings to pay off the car AND keep enough for deposit...

That's probably a bit vague, but any thoughts are appreciated.

Cheers!

USM

What deposit do you have?

dbchud

£7k at the moment. I know I need to have more so still saving, but also aware that I'll probably have solicitor fees etc...

Thrugelmir

Clear your debts before saving for a deposit. There aren't any lenders in the market that offer a product allowing you to consolidate your debts into a mortgage.

Not that its advisable. Better approach would be to cut your outgoings for a period and make a determined attempt to clear your debts.

Though I guess travelling Exeter to Bristol every day (while in the UK) comes at a price.

dbchud

I did consider that.

Do you think I'd be in a "better" position if I cleared down at least one of the loans, and take the hit on the amount I have saved?

Thrugelmir

Not only improve your chances, but save money. As your debts will incur interest charges far above those you can earn on your savings.

Repayment of debt is increasingly factored into affordability calculations by lenders. So although not preventing you from obtaining a mortgage. Will influence the options available to you.

dbchud

Thanks for the advice, appreciated.

I think I am going to pay off my car loan to start off with, asI can pay that off easily. At the very least it will mean I am not forking out £200 extra per month.

BTW travelling to Bristol isn't so bad (well, not as bad as I expected. On average I spend £200 per month on fuel (some months it can be £0, other months it could be £500, which is savage).

Thanks again.

Phill_555

Check that there aren't any early-settlement charges on your loan or they will need to be factored into your calculations.