Mortgage with £17000 debt

Steve_K_2

Hi everyone. I'm new to the forum so please forgive me if this topic has previously been covered. I am a first time buyer and keen to get on the property ladder. I have an income of £30000 and around a 10% deposit. My biggest issue is that I have roughly £17000 of unsecured debt (HSBC loan) which won't be paid off until next December. I have spoken to a mortgage broker and they have said that the lender will take my current loan payments into account when they check my affordability. They also said that it wouldn't be possible to add the current debt onto my mortgage. If anyone has had this type of issue before or has any advice then it would be greatly appreciated.
Thanks in advance

Steve

Paully232000

Shouldnt your mortgage broker be answering these questions, thats what you are paying him/her for.
Anyway, I think a bit more details might be helpful from you.
house valuation, deposit amount, any other debts/outgoings (childcare etc). How much you owe/how much you pay in debt repayment each month.
Then people might be able to give you a more useful answer.

Steve_K_2

The house is valued at £140,000 and i have a £15000 deposit. I have no other outgoings other than my loan repayment which is £886 a month (I took it out over a 2 year period).

ch3101

I expect this is a non starter.

Basically you owe your entire deposit and some. Then from an affordability point of view you get (at best) £2000 a month. Take away from that 886 for your loan, you have £1114.

A£125000 mortgage, say over 25 years at 4% is £660 a month.

Then you'd need to find money for household bills, food, petrol etc.

Do you have an asset that you bought with the loan that could be sold?

ACG

Its not the £17k loan that is the killer, its the repayments.

£30k = £1900-2000 take home pay.
Best part of 50% of your pay has gone before you have even started.

Can you extend the term to reduce the payments? If so would your broker then be any more confident of getting it through?

Personally i think anything more than say £250 in repayments and you are going to struggle.

Paully232000

from a purely personal point of view, not an expert in mortgages, just maths this seems to be very tight squeeze on your finances.

(I worked out) 1946-886=
£1060/month left not including mortgage bills etc

I dont like to be negative but, I would be worried, even if someone was to lend me that amount what happens if my car packs in/boiler needs replacing etc etc where do i find the money.

Leon_W

That loan, by my rough calculation, will affect the mortgage amount available to you by about £40k and I don't mean higher !

Thrugelmir

The lenders view will be that you have borrowed your deposit. If you had saved your deposit then you would have demonstrated an ability to manage money. Something which the lenders are looking for. As repaying a mortgage over 25 years requires discipline. Lenders are expecting to receive 300 monthly payments made on time.

Steve_K_2

Thanks for all the replies. I assumed that it would be the case that I'd struggle getting it on an affordability. I won't be able to get the loan extended as I signed the agreement with the bank for 24 months. To be honest, it may work out for the best this way as I'll be completely debt free when i come to apply next year and with an immaculate credit report. Thanks again for all the helpful advice

AFK_Matrix

If it was me then I would use the £15k deposit amount to pay of the loan and then save the £886 a month loan repayment to use for a deposit. In 16 months time you will have your £15k deposit again and be in a much better position. This is all assuming you can do overpayments on the loan, if there is an early repayment fee then pay off say 16k of loan and pay off £1000 over a couple of months.