First mortagage and debt levels

mrsandmrs

Hi all, this is my first post here. I wanted to ask people's experiences of getting a mortgage and how this relates to your level of debt.

My partner and I are hoping to apply for our first mortgage in say a year, when we will have a healthy deposit to put down (roughly 25%, maybe 30%). My partner has no debt and the last time she did was many years ago. I mean, she does go into her overdraft occasionally but always pays it back within the month. Oh and she just took out credit to get a new computer but that's it.

I (and my partner doesn't know this as I feel a bit shamed!) have (on top of my student loan) a £600 overdraft that is always maxed, a credit card currently at £1400 and a personal loan which still has £4000 to pay off (over the next two years).

I've never missed a payment and last time I checked I had an excellent credit rating. Yes, I have a reasonable amount of debt, but I never have problems paying it month to month. I've just applied to top up my loan by £1500 in order to ditch the card and get part of the overdraft out of the way. that way I can be more sensible and not end up spending on the card. I don't know the outcome of that application yet though.

Anyone had similar debts and got their mortgage?? Have to say I'm dreading it when they scrutinise my credit and my partner finds out about all these things!

Your experiences of what the lender said about your debts would be great. Please don't say just to pay it off in advance of applying, as this will take me 2.5 years currently.

Many thanks.

ShALLaX

How can you save up a 25% deposit on a house but not pay off such paltry (by comparison) debts?

Use some of your deposit to pay off your debts then replenish your deposit over time. The rule of thumb is to pay off debts before saving (but keep a healthy amount to cover you in the event of an unforeseen financial situation).

_Andy_

"Have to say I'm dreading it when they scrutinise my credit and my partner finds out about all these things!"

Why not just be honest now? Hardly fair to start thinking about a serious financial decision whilst keeping them in the dark.

mrsandmrs

Hi, thanks for the replies, however I was asking for others experiences of getting a mortgage, not personal judgement on why or why not I haven't disclosed things to my partner, as that is complicated.

@ShALLaX The deposit is coming from my partner, so it's not me that has it/can access it to pay off debts.

laidbackgjr

What is your salary, if you earn £200k your debts are small and getting a mortgage shouldn't be a problem, if you earn £10k, very different. I would think all those debts will do is impact your affordability and lower how much they will lend, not stop you getting a mortgage full stop.

bargainbetty

You will need to disclose all of it to the bank, who will then combine the two incomes/expenditures to decide if the mortgage is affordable and reasonable.

I had personal debts and managed to get a joint mortgage, and then managed to swap it to a solo mortgage when we split up (and I had higher, pre-LBM debts too), so you may be OK.

However, your partner will see them all then, so you might as well tell her now - she might be willing to help you by letting you repay the deposit fund rather than a bank, to save the interest too.

mattyprice4004

Talk to your partner about the debts, as she's going to find out anyway. Use some of the deposit to pay debts off, and you'll have a better chance.

mrsandmrs

I will definitely tell her- as I certainly wouldn't just turn up at a mortgage lender and let her find out at that point.

My income is £25k. My partner has recently been made redundant (doing some freelance for now) but we would not apply for a mortgage until she is back into a regular job that earns her £28-£35k.

It's good to know that other people can get mortgages with some debt and I reckon those of you who have said I'd probably be successful in getting one, but the debts would affect what we are offered, are probably right- Due to my good credit history and at least having the ability to manage my current debt quite well, I'd hope not to get turned down.

I guess it is an option that my partner could pay off my debts for now until a mortgage is secured but I certainly wouldn't expect to rely on that. I like to pay off my own debts and have never asked my partner for financial support.

Thrugelmir

Buy a few bottles of wine and get them chilled for the weekend. Easier for the two of you to tackle the problem than one. After all that's why you are in a relationship.

hcb42

the credit card and the loan are pretty small, shouldnt be a problem, living in the overdraft is more of a problem (although again as long as you are not exceeding it...) Better to aim to stay in the black, get rid of that over the next couple of months.

lawriejones1

This shouldn't be a problem, but I the deposit is your partners then don't use it to pay off debts. It will cause some problems or resentment.

A £4k loan is what, £70 a month? Hardly a big deal.

Start economising, selling stuff and see if you can get a second job or income. Approach your partner with a solution not a problem and sort it out.

I've heard of some horrendous examples of hidden debts, yours is nothing to worry about.