What should I do......

cb_999

Hello , quick question to you guys in the know.


As a potential first time buyer, I am saving up for a deposit. I currently have personal debt of 25k,( about a quarter of my salary). I am considering borrowing an additional 12k. Will this destroy my chances of getting a mortgage later in the year? I expect it will have an effect, but it will it torepdo my plans? I appreciate that all lenders will have different criteria, just after some thoughts?

Dave_Ham

This is not me judging, but yes I would suggest unless you are on a very high salary your current level of debt would be an issue.

Then, if on a high salary the fact you have this debt will be an issue.

Remembering you need at the very least a 5% deposit for a mortgage...

Possibly not the right time to think about buying, although you have only provided limited information and therefore I have provided limited information.

You could have a big probate for £100k inheritance due in 3 months, which the additional debt would not make a hugely material difference then...

Good luck

The_J

It will reduce the maximum level of borrowing and take your debt to about 40% of your income, that could be a concern for some borrowers but probably not all.

What property value region are you looking at buying?

cb_999

Thanks for the replies. My salary is around 100k and I would be looking to buy something for around 250k . I am well on the way to getting a 10% deposit by Xmas. In my mind, I have low/zero interest on my outstanding debts, I am able to pay them off (within 2 years at current rate) and save for a deposit. So why not buy a house now which will have a mortage around the same as my rent (1k). That way instead of paying off debts at a faster rate and paying rent I am building equity as will have a house...

Dave_Ham

With that type of income, you should potentially be ok.

Heads up for the incursion of a truck load of posts referencing your income and need for unsecured credit..

cb_999

Lol, thanks for the heads up.

I got the debt before that income! I have been driven to strive to earn that much so I can afford to buy the house.:)

Thrugelmir

cb_999 wrote: »

I am well on the way to getting a 10% deposit by Xmas. In my mind, I have low/zero interest on my outstanding debts.

A lender would take the view that you are borrowing the deposit.

So in reality haven't saved anything.