paying of debts with sale of house - new mortgage

cowsnhope

Hi
I am selling my house (separating from husband) and buying a flat. I have a debt (car loan) which I will be paying off with some of the proceeds from the sale of the house. My question is - will there be any comeback if I don't pay off all the debt? When I bought my current house I did the same thing and through an error in an online payment one of my credit cards did not actually get cleared for over six months when I eventually noticed that it had not been cleared but nothing happened so I'm wondering if they actually check and if they do what they'd do about it.
Many thanks

ViolaLass

As long as you're making loan payments on time, it's up to you whether you overpay. Ditto with credit cards.

Contemptuous

It depends whether the lender has factored that loan being cleared into the affordability calculations, and they can also make it a condition of the mortgage offer. If they do this, the solicitor would then be obliged to confirm the loan has been cleared prior to utilising the mortgage funds.

Thrugelmir

Lender may well factor any existing credit liability into account when making you an offer.

If it's a clause of the offer itself. Then it protects the lender from any event that may occur. Onus is on you you to clear the debt. Failure to do so will leave in breach. On a technically legal basis, leaves you exposed and without defence.

cowsnhope

Thank you
I was looking at a flat that really needed a new bathroom and can afford to pay my current car loan off monthly (I know this as my outgoings will be going down after I move and I'm managing fine now) so it would have been nice to do the bathroom instead but if it puts me at risk of being turfed out or fined or something I'll just keep looking for somewhere that won't need me to spend any extra money. I'm wondering though what is to stop me paying of all my agreed debts and then getting some more - i.e. paying for the bathroom on my credit card?

Contemptuous

There's nothing to stop you paying your debts and then accumulating more once the mortgage completes. Just don't take out any credit prior to completion.