Mortgage while paying off a loan

idkwhattosay

Hi all, i'm not taking out a mortgage yet, but I was curious...

If I'm a FTB with good credit rating and have a personal loan, can I still get a mortgage? I want to get a mortgage late 2016 or early 2017 but I'm currently thinking of buying a car (because my current one is slowly dying).

So right now I'm saving £1000 every month on £25k salary, see my dilemma:

loan £7000 over 2 year = £300/month payment = £700/month saving
loan £7000 over 1 year = £600/month payment = £400/month saving

Of course the first option is better because my payments are lower and I still get to save a decent chunk every month BUT I'm afraid if paying off a loan means you can't get a mortgage then loaning the money would mean I don't get to buy for a whole extra year!

If I however take out a loan over 1 year, instead of 2 years, I'll pay it off in full next Nov BUT my payments are higher and I don't get to save as much. (even though my salary is going up to £32k in Jan, but let's leave that aside for the sake of the argument)

So that's that UNLESS anyone here has experience with this and can confirm you can still get a mortgage if you're paying off a personal loan or not you can't get it. I'd like to know what's up with this so I know how to proceed. I've read the last 10 pages in here and also googled this but I couldn't find anything useful, so apologies if this came up before.

kirtsypoos

I have a personal loan and a few credit cards outstanding and received my mortgage offer last month. If I remember rightly they take the monthly payment off your affordability amount, so if you plan to take out a mortgage before paying the loan off the smaller amount would have less of an impact.

BUT it means you paying more interest, and if you can pay it off by next november, could you delay your mortgage application until it's paid off?

idkwhattosay

Thank you so much for replying here, I guess it's not a problem then.

chester81

kirtsypoos wrote: »

I have a personal loan and a few credit cards outstanding and received my mortgage offer last month. If I remember rightly they take the monthly payment off your affordability amount, so if you plan to take out a mortgage before paying the loan off the smaller amount would have less of an impact.

BUT it means you paying more interest, and if you can pay it off by next november, could you delay your mortgage application until it's paid off?

Pleased to see that you have received a mortgage offer. I have seen your other posts. I am also in debt and considering moving house so It reassured me to see that you haven't been held back by having some outstanding debts. Our debt is 40K (joint) though

Thrugelmir

idkwhattosay wrote: »

So that's that UNLESS anyone here has experience with this and can confirm you can still get a mortgage if you're paying off a personal loan or not you can't get it. I'd like to know what's up with this so I know how to proceed. I've read the last 10 pages in here and also googled this but I couldn't find anything useful, so apologies if this came up before.

What's your aim. To use the loan monies advanced to boost your deposit?

eclipse2015

I have £10,000 left on a loan, with payments of £530 per month, and also £8,500 on a credit card and so was worried about my mortgage application too, but we got ours approved today with Natwest via our Broker, and only applied last week so no issues at all which I was surprised about!
Natwest's affordability calculator is really accurate and it let's you put all you loans/credit cards/debt into it and then tells you how much they would be able to lend you.

Zoology_Dragon

Could you get a cheaper car?

idkwhattosay

Thrugelmir wrote: »

What's your aim. To use the loan monies advanced to boost your deposit?

No, my aim is to take a personal loan while still being eligible for a mortgage.

Zoology_Dragon wrote: »

Could you get a cheaper car?

I could but I don't want to. I just can't afford to buy a cheap car again and besides if I want to apply for a mortgage in a year's time, then what's the difference between taking out a loan over 2 or 5 years? In both cases it will be debt present on my record while I apply for mortgage.