Mortgage Advice

Bobby_Peel

Hi, I still live at home with my parents so don't know much about them to be honest.

I currently owe £8000 on credit cards/loan and pay around £400 a month off towards them.

What makes me mad is that I could be using this £400 to buy a house with.

Is it possible to get a mortage but get £8000 extra on top of what I need and pay my debts off with it?

Thanks

herbiesjp

The simple answer is yes you can.

In reality it will depend on a lot of things based around your scenario:
What purchase prices are you looking at?
What deposit do you have available?
What is your income?

david29dpo

how long is a piece of string? you tell us nothing about your income etc to let anyone advise you on getting a mortgage. as for getting mad paying £400 a month on a CC, well........!

LisaT186

It is possible to do this dependent on income house price etc, but please bear in mind that the £8,000 instead of being paid off in say 3 years, will then being paid off over perhaps 25 - 30 years which means that you will end up paying a lot more interest.

Bobby_Peel

I'm just looking towards the future really and can see your point Lisa.

I'm currently on £31,000 a year.

Is it still three times your wage for the mortgage allowance?

Thanks

LisaT186

No it can be up to about 4.5 times income at 100% dependant on your credit score. The main consideration is going to be affordability.

AndrewSmith

Bobby_Peel wrote:

Hi, I still live at home with my parents so don't know much about them to be honest.

I currently owe £8000 on credit cards/loan and pay around £400 a month off towards them.

What makes me mad is that I could be using this £400 to buy a house with.

Is it possible to get a mortage but get £8000 extra on top of what I need and pay my debts off with it?

Thanks

The thing to remember is that by adding it to the mortgage you are not, in fact, paying your debts off but are actually substantially increasing the real cost of them.

the real cost of adding £8000 to a 25 year mortgage assuming a rate of 5.75% is £50.33 per month which equates to £15,000 over the 25 year period. Not so attractive now is it?

My advice to you is this. If you are paying an extortionate interest rate then maybe it could be beneficial to you to add the credit cards to the mortgage. If, however, you are paying a normal average rate and simply want the convenience of the cards being repaid then don't do it.

In a time of rising interest rates and an ever slowing housing market I personally do not think it is prudent to be borrowing in excess of the purchase price of one's first home.

If you do not 'need' to move out of your parents just yet then don't. Get the credit cards paid off or reduced to a manageable level then start to look at buying a home.

Andy