Declaring student loan for mortgage

speed1972

Hi

I know this will be frowned upon. But this year I have just earnt enough to start paying back my student loan. But only because I was helping a friend at the weekends. I don't do that anymore so my earnings will drop below the payment threshold

however if I delcare my student loan the mortgage company will use it on affordability.

As it doesn't show on my credit file. Realistically can they actually find out I have a student loan.

Thanks
MS

kingstreet

Yes, if it shows on your payslips or bank statements.

betmunch

Out of interest how much would a £0pm commitment impact on your affordability?


I'm being facetious of course, but in seriousness. If you have it you need to declare it.


If you're not at the threshold to pay it then you needn't worry about it.

kingstreet

It's worth bearing in mind, lenders often take the highest amount visible on any of the payslips from the last three months.

This can cause problems if you get a bonus one month as that will cause your loan payment to increase on a one-off basis, but a lender will assume your student loan payment is that amount every month.

fairy_lights

Even if you earn enough some months to pay your student loan back it's likely to be a pretty small amount - I currently pay £23 a month which I don't think has much of an impact on affordability, It certainly hasn't hindered my current mortgage application.

speed1972

Thanks

I've NOT paid anything to them yet so won't show on bank statements etc.

Sorry should have also said I'm self employed.

I thought the mortgage company would see the £18k I owe and deduct that from the max amount they'll lend

Lokolo

speed1972 wrote: »

Thanks

I've NOT paid anything to them yet so won't show on bank statements etc.

Sorry should have also said I'm self employed.

I thought the mortgage company would see the £18k I owe and deduct that from the max amount they'll lend

No. The capital amount isn't considered, just your repayments.

Someone owing £18k and paying £20 a month will have the same affordability as someone owing £58k and paying back £20 a month.

lulu_92

I hadn't even thought of this and I'm applying for my first mortgage this year.

Would it be that much of an issue? It comes out of your gross pay so it's not like it's another bill to pay. I've been paying it since April last year and it's always been between £79-£100.

speed1972

Lokolo wrote: »

No. The capital amount isn't considered, just your repayments.

Someone owing £18k and paying £20 a month will have the same affordability as someone owing £58k and paying back £20 a month.

This will a smile make:D

Lokolo

lulu_92 wrote: »

I hadn't even thought of this and I'm applying for my first mortgage this year.

Would it be that much of an issue? It comes out of your gross pay so it's not like it's another bill to pay. I've been paying it since April last year and it's always been between £79-£100.

I had quite good affordability vs. borrowing so it didn't really affect me, but I think if you are quite close to the border line (trying to borrow the maximum the calculators state you can borrow based on gross income) then they may well look closer.

amnblog

Not sure what the discussion is going on for here.


Failure to declare your student loan is mortgage fraud and is illegal.