Is a mortgage achievable?

baxt3r

Hi all,


Just wanted to ask some advise on whether we'd get a mortgage on help to buy with existing credit card debt. Appreciate that it would be best to pay it off and we've been working on doing this but would like to buy if we can. Here's the details.


Salary total - £59,800
Loan - £13k - £421 per month
HP - £6k - £135 per month
Credit Cards - Total £20k (may be able to get this to £15k before applying)
Store Cards - £1.5k


Looking at homes in the £215k price range and we have £11k for the deposit so with help to buy would need a mortgage of £161K.


Do we stand a chance?




Many thanks

ACG

I dont really do help to buy equity loan mortgages, but I think it is very tight.

Have a play around on some of the affordability calculators. Some of them do ask if you will be using the htb scheme.

baxt3r

Hi ACG,


Thanks for replying.


Have looked at a number of them and most come back that they'd loan enough, I just have no idea how accurate they are or if an underwriter would knock it back anyway.

ACG

The calculators are accurate.
Its a bit difficult to second guess the underwriter, I dont think the debt in itself is an issue but it will play a part int he scoring of the application.

baxt3r

That's great, thanks pal

Lee76

Is there any disadvantage in applying for a mortgage over the maximum term allowable? Obviously you shouldn't overstretched yourself but when going for the best rates (ie HSBC and First Direct) where you may be borderline, but achievable elsewhere, would this not put you in a better position while still being able to overpay to reduce the term back down?

The only disadvantage I can see is when you come to a point at which the outstanding balance isn't large enough to support the 10% overpayments, at which point I would imagine you could remortgage anyway. Am I missing something?

baxt3r

Hi Lee,


I'm happy to apply over any term if it allows us to get the mortgage we need.

Dird

How much are the monthly charges on that £21.5k card debt?

You have a £13k loan and £11k deposit, do most mortgage companies not view that as having no deposit?

If the £11k cancelled out some of the debt, you still have debt worth 80% of your net salary before taking on a mortgage. While I'm not a banker I wouldn't entertain that risk

kingstreet

Dird wrote: »

How much are the monthly charges on that £21.5k card debt?

Mortgage lenders typically take 5%, so I'd use £1,075 a month regardless of what's actually being paid.

Dird

kingstreet wrote: »

Mortgage lenders typically take 5%, so I'd use £1,075 a month regardless of what's actually being paid.

So 50% net income going towards loans excluding the mortgage. Am I right in thinking they'll be viewed as having no deposit given the £13k loan?

baxt3r

In reality it's not 50% though but even with this in mind nearly all affordability calcs would offer enough to cover what we need so if these are accurate then hopefully we'll be able to get one. I pay more in rent anyway so know I can comfortably afford the repayments and continue to reduce my debts.