FTB Advice

greggles

I need some advice on what to do in preparation for a first time buyer mortgage.

I earn £40,000 a year and currently have £10,000 saved for my mortgage, however I have a debt of around £8,500 on a 0% interest card.

Will this debt be taken into account when I apply for my mortgage? My monthly re-payment is £150.

Should I clear the debt and then save for another 3 years etc? Is there a way for me to get a mortgage with this debt.

Thanks

csgohan4

Debt will reduce your affordability. IMO pay off your debt and see why you accumulated that amount.


Any pay day loans?

greggles

No took a loan last year to help the family in time of need, then changed it onto a 0% interest card.

Debtslayer

The debt will be taken into account as it is debt and a monthly commitment; it will affect how much you can borrow
That is not to say you won't get a mortgage
Best if you speak to an independent mortgage broker and ask them; they know the market inside out and will know what is and is not acceptable and the best lenders to approach; considering all your circumstances and outgoings
They will probably give you two figures you could borrow (if they think you will get a mortgage): 1) With debt and 2) Figure without the debt

kingstreet

Most lenders take 5% of the card balance as the monthly cost of card debt. You might be paying £150, but lenders will "tax" you £425 in affordability.

One high street lender will reduce what you can borrow by £17k from £180k to £163k for that card debt.

csgohan4

kingstreet wrote: »

Most lenders take 5% of the card balance as the monthly cost of card debt. You might be paying £150, but lenders will "tax" you £425 in affordability.

One high street lender will reduce what you can borrow by £17k from £180k to £163k for that card debt.

That's quite significant despite it being on 0% CC