Mortgage and existing personal loans

JJB223

Hi all

We are looking for a house and thus a mortgage, we have an existing personal loan and its monthly payment is app 8% of our take home pay.

Calculators say we can borrow up to £271k based on our 65k joint salary however we are limiting ourselves to £160k (£144k mortgage and 10% deposit) so affordability is fine, after projected mortgage payment, all bills, monthly expenses including clothing, food, activities etc we still have £1800 left over.

My question is, how likely is it that lenders will make clearing the loan a condition of the mortgage, we are hoping to clear the loan balance (9.8k) in the next 12 months anyway but no way could we do it before completion, given the affordability and low %age the loan payment takes from our take home is this likely to be an non issue

Thanks

amnblog

They wont if there is not an affordability issue.

kingstreet

Enter the monthly payment in affordability.

If the amount you wish to borrow is affordable with your other outgoings, there is no reason why you would be asked to repay it.

JJB223

Ok thanks for that, am 100% sure affordability would be fine, have also stressed tested the payment at 7% int and still have a lot left, we have also over estimated all our monthly spending to be double sure

betmunch

JJB223 wrote: »

Ok thanks for that, am 100% sure affordability would be fine

You need the lender to be 100% sure affordability will be fine.


Go on their site, add it as a commitment and see what comes back.

JJB223

Thanks all the calcs I have tried HSBC, nationwide, santander, Halifax are all around 260-275k and that's including declaring the loan payment, as the mortgage will not be more than 150k at the very top hopefully will be fine

betmunch

If you meet their criteria and the loan is declared no reason to think otherwise.

Go for it