How Mortgage Lenders evaluate existing debt when applying

Rabster8

Having substantially reduced my outstanding debt to comfortably manageable levels, I plan to apply for a mortgage within the next few months. Before I do I plan to pay off a further chunk of my debt with a lumpsum but would appreciate some advice on which debts to clear in order to maximise the potential of my mortgage application.
Although up until now I have been paying off debt according to which interest rate is higher, I am no longer looking to minimise interest payments but to increase the chances of my mortgage application being successful.

I have a bank loan which only has a couple of years to run and the monthly repayment is about 7% of the amount outstanding, although with a fixed repayment this percentage will increase month by month

I have a credit card Life of Balance with exactly the same interest rate but the minimum monthly payments is only 2.5% of the outstanding amount (I believe that lenders used to assume a monthly repayment of 5% of the outstanding debt for credit cards, regardless of the actual monthly repayment, although not sure if this is still the case)

My questions are:
Are mortgage lenders more concerned with amount of outstanding debt or amount of monthly repayments?

Also - Do they favour bank loan debt over credit card debt when considering an application?

Thanks in advance for your commments

RedSoleShoes

I believe that a loan is more likely to go against you than a credit card debt.

Rabster8

LilyDeTilly wrote: »

I believe that a loan is more likely to go against you than a credit card debt.

Thanks - What is the Bank's reason/logic behind this out of interest?