Adding loan to mortgage

b21playa

Hi all

I am looking to buy a house, but currently have around £10k left to pay on a personal loan.

I have a 10% deposit for a house, is there anyway I could take an extra £10k out on the mortgage to pay for the loan, which would make life easier, and have less monthly outgoings?

Thanks

_Andy_

No, as then there wouldn't be any deposit.

b21playa

_Andy_ wrote: »

No, as then there wouldn't be any deposit.

ah right, makes perfect sense.

Might be better for me to just keep making the repayments for the next 20 months or so, and carry on reducing some of my other costs.

JimmyTheWig

How much are you looking to buy a house for? I.e. how much money is your 10% deposit?

harvey115

If you would like to pay off your loan first, it would go out of your deposit amount and you will be below the 10% mark. Thus it will be slightly harder or not good rates will be availabe to you.

Bearing in mind the £10K loan will be visible to the lender when you apply for a mortgage so they will factor this in to their affordibility calculator to work out how much they can lend you.

Hope this helps

b21playa

JimmyTheWig wrote: »

How much are you looking to buy a house for? I.e. how much money is your 10% deposit?

I have around £17k for a deposit

b21playa

harvey115 wrote: »

If you would like to pay off your loan first, it would go out of your deposit amount and you will be below the 10% mark. Thus it will be slightly harder or not good rates will be availabe to you.

Bearing in mind the £10K loan will be visible to the lender when you apply for a mortgage so they will factor this in to their affordibility calculator to work out how much they can lend you.

Hope this helps

I saw a mortgage advisor a while back, and they looked at my early outgoings on the loan, and subtracted this from my salary to base what I could borrow

JimmyTheWig

b21playa wrote: »

I have around £17k for a deposit

So you are looking at properties for £170k? So with your 10% deposit you'll need a mortgage of £153k.

You could use £10k of your deposit to pay off the loan.
Then you'd have £7k deposit and need a mortgage of £163k.

That would be 95.9% loan to value, which won't wash with lenders.
You might be able to get a loan with 95% LTV. In which case you'd need £8.5k deposit. Can you save up an extra £1500?
Alternatively, using your £7k as a 5% deposit could you find a property for £140k?

I don't know much about the availability of 95% mortgages these days. I've heard there are some, but I don't know if they are easy to get and/or if they are good value.


Are you saying that getting a mortgage with the loan in place is proving difficult?
If that is the case then it is probably worthwhile paying off the loan with savings now. Chances are that will save on loan interest (but do the sums first, including anything you will be charged to pay the loan off).
You can then add the money you've been paying to the loan company each month to your deposit pot and then buy once that pot has reached what you need.

harvey115

I think you should speak to a good mortgage broker and see through your chances of getting a mortgage. They would be able to asses your circumstances before making an application, so the chances of getting an offer through would be higher.

Best of luck...