Mortgage affordability criteria

C034657U

Hi all, newbie looking for some advice please. We are in a situation where we want to downsize and use some of the equity to clear debts. So far we have been told we do not meet affordability criteria because of the debts. Once the debts are cleared we do meet the criteria. So therefore we would have plenty of funds but only after we have the mortgage, have sold our property and cleared the debt etc.. The question I have is "do all mortgage companies follow the same or similar criteria?" If that is the case we will not be able to get a mortgage at all which is pretty sad. Thanks in advance..

kingstreet

Abbey/Santander?

Their system assumes you will simply run up the same debt as you already have, so paying it off makes no difference to affordability.

Other lenders do not take this approach, happily. They will exclude any credit with less than six months left to run, or which you indicate you will pay off on, or before, completion.

Thrugelmir

How much debt are you looking to settle?

Any issues with late payment etc?

C034657U

Hi again, thanks for quick responses, we are looking to settle about £30000, got plenty of positive equity in the house so its not a problem financially, no problems with missed or late payments. Glad to hear there are companies out there who will lend knowing I will pay off the debt.

kingstreet

They will make it a condition of the mortgage that the liabilities are repaid at completion. Some even request confirmation from the solicitor handling the conveyance.