Will my debt levels make it impossible to get a mortgage?

MJP43

Hi,

I have circa 40k cash for a deposit following my house sale 6 months ago. My wife and I are in rented accommodation for a short period.

I have a basic salary of 58k and my wife has a basic of 31k.

Looking for a mortgage of around 280k on a 320k purchase (about 88% lTV)

I have credit card balances of 14.5k and an unsecured loan paying £332 a month

Wife has cc balance of 9k
.
Debit is serviced very comfortably and no missed payments

I'm very worried that the level of indebtedness is going to hit my score so hard that it will be a stopper at the first hurdle. The affordability calculators seem to come out ballpark of what I'm looking for.

Won't be looking to buy until April next year hence why no conversation with potential lenders yet.

Does anybody know/have experience of similar? Am I wasting my time aspiring to this?

Thanks in advance

billybear1

Whilst no-one fully understands your interest rates etc, many will comment and I imagine the bank will at this stage also, why you are not using the cash you have to service your debts first. Pay off your £23,000 of debt which reduces it to your £332 a month (clear that too if you can, which I imagine you should be able to) and look for a 5% product. Or, if you cannot get a 5% product, save for a year get a 10% product, or get a less expensive house.

Put yourself in a lenders shoes - do your actions present the attitude to money of a person that you would want to lend £280,000. Be objective, rather than subjective, because ultimately they do not know you - all they will see is what is on paper.

Thrugelmir

MJP43 wrote: »

Debit is serviced very comfortably and no missed payments

Maybe so. However you earn £89k a year and owe (I'm guessing) around £30k. So what's the contingency plan to service this and a £280k mortgage if you lose one of your incomes? Or even worse your relationship breaks down.

Lifestyle is a personal choice. Decide your priorities and move forward from there. The one certainty is that no longer can you have your cake and eat it. Far tighter regulation of lending is seeing the end of the credit boom.

MJP43

I am working hard to drive down levels of debt and believe me by and large it wasn't incurred by "having cake and eating it".

Westminster

MJP43 - I've sent you a PM

Thrugelmir

MJP43 wrote: »

I am working hard to drive down levels of debt and believe me by and large it wasn't incurred by "having cake and eating it".

No emergency savings is a lifeboat many people fail to build. Sign of the times.

Attitude to money is actually very predictable. More than people realise. Some people are risk adverse others see no problems. That's down to the genes we are born with.

Westminster

No emergency savings is a lifeboat many people fail to build. Sign of the times.

Quite a generalisation if you don't know the circumstances.

All my debt was incurred when my wife was diagnosed with MS and deteriorated very rapidly so I had to become a full time carer surviving on income support / carers allowance etc which lasted for 18 months before I could return to work. I can't imagine too many people are able to squirrel away enough in savings to deal with that kind of issue.

suicidebob

Westminster wrote: »

Quite a generalisation if you don't know the circumstances.

All my debt was incurred when my wife was diagnosed with MS and deteriorated very rapidly so I had to become a full time carer surviving on income support / carers allowance etc which lasted for 18 months before I could return to work. I can't imagine too many people are able to squirrel away enough in savings to deal with that kind of issue.

Of course it was a generalisation. Your circumstances are hardly prevalent.

MJP43

Thrugelmir wrote: »

No emergency savings is a lifeboat many people fail to build. Sign of the times.

Attitude to money is actually very predictable. More than people realise. Some people are risk adverse others see no problems. That's down to the genes we are born with.

I appreciate you are trying to give sage advice but the horse has bolted.

I have not tried to go into any IVA or ducked my liabilities. I am driving my debt down as advised and my creditors will be paid in full plus interest.

I work very hard and pay all taxes due.

God willing I will be debt free within 3 years mortgage notwithstanding.

Thrugelmir

MJP43 wrote: »

I appreciate you are trying to give sage advice but the horse has bolted.

I have not tried to go into any IVA or ducked my liabilities. I am driving my debt down as advised and my creditors will be paid in full plus interest.

I work very hard and pay all taxes due.

God willing I will be debt free within 3 years mortgage notwithstanding.

I'm not expressing a personal opinion. Mortgage lenders don't have time to appraise borrowers individually. Lenders assess risk on statistical facts. Mortgage lending is a low margin low risk activity. As a lender running a book of 750,000 mortgages. I wouldn't underwrite your business at the current time. That doesn't mean never.

billybear1

Thrugelmir wrote: »

As a lender running a book of 750,000 mortgages. I wouldn't underwrite your business at the current time. That doesn't mean never.

And therein is expressed the truth of the matter I was dancing around. Ir's a purely statistical exercise - on paper is this person worth lending to. At the moment I think you would be hard pressed to find anyone willing to do so - however, see my first post and there are some pointers - maybe not the ones you want to hear right now though.