New mortgage and uncleared debt

dipdap

Hopefully this is the right board to post this in:)

We've sold our current house and been approved a mortgage for a new house (using 20% htb) and have a 5% deposit coming from the equity in this place, new house isnt ready for a couple of months yet.
When we applied for the mortgage they did all the checks and we confirmed all debts would be cleared from the equity in the house, now it seems we may be a little short to clear all the debts (affordability checks were done way back in January)
The main sticking point is a £8k debt which has an APR of 3% and is £200 a month and doesn't allow overpayments. We'll probably have enough spare cash to clear half of it (we can easily afford to keep paying £200 a month when we move if we need to)

I'm just worrying about what happens if we move and clear all debts except for that one, I'm sure in our mortgage terms it would say we have to clear them all. I don't want to upset our new mortgage provider from the start

Any help and advice appreciated, tia

Thrugelmir

dipdap wrote: »

I'm sure in our mortgage terms it would say we have to clear them all.

What precisely did your mortgage offer say?

dipdap

Thrugelmir wrote: »

What precisely did your mortgage offer say?

I've got all the paperwork in front of me and there's a fair amount of it.
DH has said it's probably in the terms (otherwise people would move house and just not pay all their debts despite saying they would?)
Is it possible I'm wrong and it may not stipulate it in the terms?
I'm gonna have a good read over a cuppa to check.

Westminster

I think mortgage offers follow a standard format these days - so I would be looking at the bottom where you should see a section called 'Supplementary Conditions'

Foxy-Stoat_3

You should speak to the lender/broker and confirm that not all the debt will be cleared in time for the new mortgage, as their offer was based on the fact that all your unsecured debt will be cleared. Better prepare for it now than a couple of weeks before you actually need the mortgage completed.

dipdap

Thanx all for the replies.
We've both read every bit of paperwork we can find and there's no mention either way. No supplementary conditions or anything else.
I don't plan on flagging anything up with the broker as don't want to go screwing everything up.
I figured it's better to worry about it now than the week we're due to move.

Foxy-Stoat_3

dipdap wrote: »

Thanx all for the replies.
We've both read every bit of paperwork we can find and there's no mention either way. No supplementary conditions or anything else.
I don't plan on flagging anything up with the broker as don't want to go screwing everything up.
I figured it's better to worry about it now than the week we're due to move.

Gotta - your going to continue as planned and lie on the application.

Good lucks

dipdap

Foxy-Stoat wrote: »

Gotta - your going to continue as planned and lie on the application.

Good lucks

I don't plan on lying on any application all paperwork has been done and dusted as far as I know.
We've already exchanged contracts so we're legally bound to buy the house.
I plan on doing everything I can to make sure we're not breaking any rules when it comes to completion.

Westminster

Perhaps play innocent and ask your solicitor if they are aware of any conditions (they will also have a copy of the mortgage offer) as it is they who will prevent you from completion at the last minute if there is something they are required to confirm for the lender ... and that would not be the time to find out in my opinion.

Being legally bound post-exchange has nothing to do with whether your mortgage company could decline to forward the funds to your solicitor - leaving you with a lost deposit at best.

Best of luck

Contemptuous

I've known lenders stipulate in the special conditions to the conveyancer (so shows in their copy of the mortgage offer and not yours) that debts are to be repaid on completion and it is then their responsibility to ensure this happens. So your solicitors may not be able to complete if there aren't sufficient funds available to repay the debts as they would have a legal obligation to do so. It's up to you if you want to take the risk.

dipdap

Contemptuous wrote: »

I've known lenders stipulate in the special conditions to the conveyancer (so shows in their copy of the mortgage offer and not yours) that debts are to be repaid on completion and it is then their responsibility to ensure this happens. So your solicitors may not be able to complete if there aren't sufficient funds available to repay the debts as they would have a legal obligation to do so. It's up to you if you want to take the risk.

Thankyou so much, I think this is the answer we were looking for.
We're trying to make sure we've cleared off as much of our debt as we physically can and that the outstanding mortgage, plus outstanding debts, plus all associated buying fees (deposit, solicitors etc...) totals under the sale price of our current house.
May have to resort to bank of Mum and Dad for a small bit of help if need be.