Student Loan affecting getting a mortgage

CLAPTON

ja9_c wrote: »

Thanks all for the advise - I believe I have around £12K left on student loan so too much to pay back.

I'm just surprised that they would take this into consideration seeing as it a nominal amount and is deducted before my take home pay. I think it should be considered like an electric bill or council tax - Expenses which need to be paid after the mortgage payment has been deducted from your monthy salary. They don't ask you for how much you gas bill is on your mortgage application - then again this is in my ideal world!

I definately am pushing the amount I want to borrow to the max but with such a sizable deposit and relatively debt free (IF I have to include the student loan!) I did not think it would be this difficult. Going to try Halifax today.....

On addition I have an extra £5K emergency fund for the boiler replacement!!

If there were two people with identical incomes wanting a mortgage and with identical deposits
then if one had no debts (and hence no monthly debt payments) but the other one had debts and so had to make these payments, then it would be logical to allow the debt free person a larger loan that the one who has to make debt repayments.

The operating assumption is their other outgoings like electricity/gas etc etc would be broadly the same.

hence many companies take debt into a/c when calculating affordability although the way they do this seems to vary.

ja9_c

@surreybased - my mortgage broker says there no problem with the amount I want to borrow (£195K) however having been refused from two lenders I'm thinking there is!!

@Rov - The interest rate on the student loan is 0-1% so as Martin Lewis advised I am not going to pay if off considering I'm look at a rate of 4.99% - 5.15% on a mortgage. To pay if off wouold mean I stil cannot afford the property as this would just guarantee the original mortgage of £195K

@ Herbiesjp - I want to borrow £190 - £195K, Salary £40K - No debt except student loan at £187 per month.

Its worth noting that I am under no illusions that I am looking to borrow a significant amount particulary in this economic climate however want to try all avenues before I give up hope!

As affordability is where I'm falling short (credit score/check is no problem) is there some rule of thumb about how much income they are looking to remain after the mortgage repayment?

herbiesjp

ja9_c wrote: »

@surreybased - my mortgage broker says there no problem with the amount I want to borrow (£195K) however having been refused from two lenders I'm thinking there is!!

I think your instinct could well be right.

And on that basis, I'd suggest getting a second opinion from a different whole of market adviser.

Give them the exact same information, and see what they come back with.

I think your current broker is telling you want you want to hear - building up your expectations and then not delivering the expected outcome.

Based on what you have posted, I most definitely would not be saying no problem to get the mortgage with those income multiples.