Mortgage Affordability

Smoggie69

When looking at debts against mortgage affordability, is it better to have debt on credit cards & overdraft or on a single mortgage.

I realise having no debt is the best solution, so don't need any responses to this effect.

Thanks in advance for any help.

Thrugelmir

Continual overdraft usage suggests that an individual lacks self control when it comes to handling their personal finances. So this I would eradicate first.

ACG

Its probably going to be easier to pass if its added to the mortgage - reason being is that is spread over a longer period and probably at a lower rate. The downside is its then secured against your property.

But if you pass affordability with it on credit cards/overdraft then its not an issue.

One thing to note, if you have been living in your overdraft, this doesnt go down well with lenders.

Smoggie69

Thanks for the quick responses. I've also heard that credit cards can be taken a 5% for the affordability, rather than the minimum payment, in case these ever increase, whereas the loan is taken on the actual monthly repayment.

It looks like the loan is the way forward, particularly to get rid of the overdraft.