First time mortgage with existing debt

kjl26

Hi

This is my first post and I'm looking for a bit of advice on how mortgage lenders assess. My partner and I are looking to buy a place soon-ish, probably looking at a property priced around 180-200K. We have around a 50K deposit mainly made up of my partner's investments and my ISA, and putting this into a property would still leave us with a TOISA that has 3 years to maturity, so still retaining a bit of investment. Our combined gross salary is about 42K, we're both graduates and he at least is a 'professional' with very steady prospects.


I would be really grateful for any comments.
Cheers

flea72

most companies will do the multiples of your joint income to find the highest amount they would be prepared to lend, then take off any existing debts

i dont think you would be able to get an £130k mortgage with your income/debts

might be easier, if and when you get the better paying job

i dont think i would try putting the outstanding debt onto the mortgage either - if you feel that you could pay it off sooner, once you have a mortgage - why turn it into a long term debt?

herbiesjp

Rather than put the £50k deposit - put a smaller depopsit and clear the loans? Is that an option?

This freed up affordability could allow some lenders to offer you the higher mortgage needed.

dougk_2

I'm thinking on the same wavelength as herbiesjp.

I think I would take whatever saving you have of your own and pay off as much of the debts as possible. The interest rates of the loans / credit cards are probably higher than the amount you are making on the savings.

Certainly with £50k you could pay off all or most of the debts and get a 85% or 90%LTV mortgage.

nik-nik_2

Probably shouldn't admit this, but my partner and I have a joint income of £41,000, we had a £16,600 deposit and we have just received our formal mortgage offer for £149,400 for our £166k house. When we applied, we had no saving to pay off debts. We had approx £6k on credit cards and my partner was 7 months from finishing his £10k loan.

On applying for the mortgage, we received a small list of questions which they wanted answered before they offered the loan to us. On this list we were asked how we intended to pay our outstanding debts off before the mortgage started (as we checked this box on the application). We were reliably informed that "our parents are paying outstanding debts off as a start up gift" would be sufficient. However, we pulled out from that purchase and found a new property. When we sent the new property details off we expected to receive exactly the same paperwork including the questions back, but we received a formal offer instead!!

I'm not gonna knock it cos thats even better, but we were planning on sending the above answer in. We have arranged our mortgage around our budget, knowing what we could afford, including keeping up with the loan and credit card payments as well as the mortgage, so we did intend to "mislead" the lender as we knew we could afford it. If you think you can afford the same, could you just apply and answer their questions when and IF they have any? (PS - I'm sure this isn't recommended!)

nttwill

Good luck kjl26, my wife and i have just been turned down for a mortgage with Bristol and West for a house valued at only 91950 we have debt's of 17000 but earn 42000 joint! We have now provisonally been accepted for a much better deal with Northern Rock. Apparently Bristol and West have very strict criteria about exactly who they give money too. So my advice would be dont be too down hearted if you get turned down