Car Loans and Being a First Time Buyer

robcole

Hi all,

Hope I'm posting in the correct place. My girlfriend and I have been saving for a deposit for our first house and have managed to get together a good 10% with some extra to cover the costs.

My concern and question is around being approved a mortgage whilst we both have a car loan. I have a personal loan and she has a car finance and together they equate to about 15% of our take home income.

Where do you think we will stand with this? Would there be a suitable and clever way for me to attempt to get rid of a loan to make our situation easier? Would you ever add a loan onto a mortgage to make monthly payments more affordable? I appreciate there's a lot of questions but any help would be fantastic!

Ps. my loan left is about 9K and my car is worth 7K - only thing I can think of myself is selling and clearing this loan then maybe getting a new car lease etc that is cheaper per month..... Does that make it more appealing to mortgage lenders?

forgotmyname

Clever way to get rid of the loan is sell the car and pay it off. Buy a cheaper car?

Will selling a car at a loss and leasing a car really save you money?

Sell car for £7k. Take £4k from your savings and pay off the balance and buy a cheaper car outright.
The money your currently paying each month will soon top your savings back up.

Wont a new car deal/lease mean fresh finance applications on your credit file?

amnblog

Monthly outgoings on car loans impact on your affordability.


Eliminating or reducing one loan will increase your maximum affordability.


Have a broker run you some figures to see how critical your car loans are on borrowing the amount you seek.


(No, you cannot add such loans to your mortgage)

robcole

Thank you everyone for your advice. I think I will speak with a mortgage broker to understand my situation better and if It looks like I won't be approved a mortgage I'll look to doing something about the personal loan. Thanks again much appreciated!