Personal Loan effect on Mortgage

cheersthanksbye

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Hi,
I have been approved a mortgage of 316k given my current financial status. I have not yet taken out the mortgage and am wondering what the effect of a personal loan would be.

If I took out a separate personal loan of around 25k, how much do you think this would affect the amount the banks would lend me for a mortgage?

Thanks.

herbiesjp

Normally the banks would annualise the monthly loan payment, and then deduct that figure from your income

So for emample, the monthly loan payment is £280 pm and your annual income is £60k


Annualise loan payment = 12 times £280 = £3360

Deduct from salary = £60,000 minus 3360 = £56640

The lender would then apply the income mutiples/affordability calculator on your salary of £56,640

HTH

MortgageMamma

Who has your mortgage been approved with? Are you definately going to use this lender? Did you use a broker to obtain the mortgage?

1. if you used a broker get them to calculate specifically what your affordability will be if you take the loan out.

2. Depending on the lender, they may assess off affordability or income multiples, so this really needs to be established, along with the size of your deposit, the your earnings, the term over which you want to take the mortgage and your credit rating. All of these things affect affordability.

What kind of loan will you be taking, and what will you be using it for?

cheersthanksbye

MortgageMamma wrote:

Who has your mortgage been approved with? Are you definately going to use this lender? Did you use a broker to obtain the mortgage?

1. if you used a broker get them to calculate specifically what your affordability will be if you take the loan out.

2. Depending on the lender, they may assess off affordability or income multiples, so this really needs to be established, along with the size of your deposit, the your earnings, the term over which you want to take the mortgage and your credit rating. All of these things affect affordability.

What kind of loan will you be taking, and what will you be using it for?

Thanks for the comments.

I used a broker who submitted my circumstances to the Halifax, as their mortgage check does not leave a footprint on my credit file. They were the ones who came up with 316k, but I have seen better interest rates so am wanting to go with another lender.

The loan is for a new car and I am considering taking an unsecured loan for this. How does the item you are buying affect your mortgage amount?

herbiesjp

As stated in the figures above.

They annualise the loan repayment and the deduct that from your annual income figure before applying their income multiples.

The higher the monthly repayment, the more they will deduct from your income

HTH