Paying off debt with mortgage + application

danielanthony

Hello,

We want to buy a house costing £340,000 , our current house has £70,000 equity.

Our problem is that we can only get the mortgage we need if we have no other debts. My idea is to use some of the equity from our 'old' house to clear the debts (£24k) and use the remainder as a 10% deposit (£34k)+ 3% (£10K) stamp duty payment on the new place.

Is this possible? How would it work as we would still have the debts when applying for the mortgage but would have them cleared by the time we moved and started paying the new mortgage.

If it helps, my income is £55k, wife £11k and I get about £8k annual bonus.

Dave_Ham

Hi,

I would suggest you use a broker as this will be tight.

Essentially you tell the lender or broker that you will be paying off the debt and then it we mark it on the application.

Typically, a lender will put the repayment of this as a condition of the mortgage offer and the solicitor will have to ensure this is repaid as part of their obligation to the lender..

Good luck

danielanthony

Thanks, just what I needed to know!