Hire Purchase and Mortgage Application

cassidy0111

Some basic facts about my financial situation.

Salary £34,200
Take home pay £1870 per month
(I am a school teacher and pay student loan and teacher pension contributions)

I have a hire purchase of £425 per month. This ends in April. I have a credit card with a £0 balance.

I have checked some online mortgage calculators and it appears that lenders will be ok with the large hire purchase. In the current mortgage climate I suspect the reality may be different?
Any advice or suggestions?
Should I get rid of the HP? Increase my deposit?

DVardysShadow

What deposit do you have and what are you looking to buy? And when?

In general you are better to pay off debt - which you will probably have completed byt the time you come to buy.

cassidy0111

DVardysShadow wrote: »

What deposit do you have and what are you looking to buy? And when?

In general you are better to pay off debt - which you will probably have completed byt the time you come to buy.

I have about £9000 at the moment (savings and parents). Recent Sold Prices of places I would consider purchasing currently range from £65,000 to £85,000.

I know that this is quite a big range but I want a specific area and can be flexible regarding size of property.

DVardysShadow

OK, you are looking at 2 to 2.5 times income and you have better than 10% deposit - if your credit is good, you should be able to find a mortgage. The outstanding HP is not a huge amount - although you can afford to pay it off right now, it does make your deposit look rather small - which will count against you even if you don't pay it off.

I would suggest paying it off now and putting the funds to your deposit, which will be back up there hopefully long before April

cassidy0111

DVardysShadow wrote: »

OK, you are looking at 2 to 2.5 times income and you have better than 10% deposit - if your credit is good, you should be able to find a mortgage. The outstanding HP is not a huge amount - although you can afford to pay it off right now, it does make your deposit look rather small - which will count against you even if you don't pay it off.

I would suggest paying it off now and putting the funds to your deposit, which will be back up there hopefully long before April

I was hoping to move before Christmas. I have moved back home with my parents after a messy relationship ending and I am really fed up back in bedroom I left when I was 17.

Also there are some real bargains/price-cuts around just now. What if the prices shoot back up?

My credit rating should be fine. I have never missed a payment.

DVardysShadow

cassidy0111 wrote: »

What if the prices shoot back up?

Don't panic.

cassidy0111

DVardysShadow wrote: »

Don't panic.

I know. This will potentially be a forever property for me, which is something that most people in their mid 20s could not say.

I guess I can wait and save a little longer. Hopefully any price increases will be matched by the improvement in my financial position in terms of my deposit and my hire purchase.

cassidy0111

Decided to bite the bullet mortgage wise today.

1. Have checked my savings balance (£9186.80- some of this is a gift from my parents)
2. Increased my monthly saver to £300 (currently living with parents so costs are low)
3. Phoned the Hire Purchase company to confirm what exactly I owe
4. Checked my credit report out
5. Checked three online mortgage calculators on bank websites
6. My daily Rightmove check

Anything else I should be doing to increase my chances of a mortgage?