Is 5k Debt Each too much?

DisneyLisa

We want to buy by the end of the year and will have cleared 10k of our debt in that time but we will still have 5k each. Will this on its own stop us? All that is on 0% so I dont really want to pay it off yet.

We have a 12% deposit

I know there are lots of other factors when it comes to a mortgage but will this on its own ruin our chances

Landofwood

Maybe, maybe not. Impossible to say without more info. Sorry.

DisneyLisa

Landofwood wrote: »

Maybe, maybe not. Impossible to say without more info. Sorry.

I thought that would be the answer.

TBagpuss

Not enough information to say. I had more than that last time I moved house, but I also had a larger deposit.

Have a lok at the affordability calcultors on a couple of lenders websites - they take into account existing debt so may gave you an initial idea.

If you have debt of £10K and your 12% deposit is £12K and your income is £30K you will have a very different picture than if your debt is £10K, your 12% deposit is £30K and your income £80K

Landofwood

DisneyLisa wrote: »

I thought that would be the answer.

Try plugging your incomings and outgoings into an online affordability calculator, like this:

https://personal.natwest.com/personal/mortgages/secure/how-much-can-i-borrow.html

The debt probably won't preclude you from getting a mortgage at all, but it will reduce the amount you can borrow.

DisneyLisa

We have 36K Income and only want to buy 80K home - the calculators all say we can get that level of lend

My bank keeps trying to give me a 10k loan with a great rate but im sure that would look worse on my application

lee111s

A 10k loan for what? It may be a great rate but if you're just going to borrow because it's a good rate then you need to re-evaluate your financial mind. My suggestion would be to pay of the debts and save up a deposit and buy a house debt free.


Houses are expensive enough as it is with often unexpected costs. Heading into that with debt already is a big risk IMO.

DisneyLisa

lee111s wrote: »

A 10k loan for what? It may be a great rate but if you're just going to borrow because it's a good rate then you need to re-evaluate your financial mind. My suggestion would be to pay of the debts and save up a deposit and buy a house debt free.


Houses are expensive enough as it is with often unexpected costs. Heading into that with debt already is a big risk IMO.

Sorry I didnt mean I would take it because its a good rate - they want me to consolidate our debts but I dont really want to do that. I would consider it and settle all my other accounts and close them but it seems like the wrong option.
I have more that enough income to finance my new home and debts

johannalf88

Won't some lenders look at it as a borrowed deposit as you have a 10K loan, and a deposit of 9.6k? Just a thought from what I have seen on here....

DisneyLisa

johannalf88 wrote: »

Won't some lenders look at it as a borrowed deposit as you have a 10K loan, and a deposit of 9.6k? Just a thought from what I have seen on here....

Yeah thats the main reason I dont want to touch it. It would feel better to have them all paid and closed but I dont think it will look better on my file/bank statements.

I could always take the loan, close the accounts and wait a few extra months to buy

johannalf88

But you already have a 10K loan from Credit Cards? I wouldn't have thought that would make any difference?