Mortgage offer and student loan

littlegreenfrog_2

Does anyone know what impact outstanding student loans have on the amount a bank will lend for a mortgage?

I spoke to a mortgage broker a few months ago who told me that I should be able to borrow up to £216,000. However, when I use the online calculators, this figure varies hugely. Using the Nationwide calculator, if I declare my student loan it says the maximum I can borrow is £198,000, whereas if I don't put down the student loan it says £216,000 (the same as what the mortgage advisor said).

This is just a standard 1998-2011 student loan which comes out of my salary, not a commercial career development loan.

I've always understood that paying off your student loan early is not a good idea, but I'm wondering whether there might be some advantage in paying the loan off if it means I will be able to borrow more for my property purchase.

Any advice would be much appreciated.

Thanks

amnblog

You have seen the 'impact outstanding student loans have on the amount a bank will lend for a mortgage'. About 8% in your case.

Ask your broker the best way forward.

littlegreenfrog_2

Why do some calculators ask for student loan repayment details and others not? It seems as though the mortgage broker didn't include this in his calculation, even though I'm pretty sure I mentioned it.

I don't want to get to the point of making an offer on a property and finding out I can borrow less than I thought. I also don't want loads of hard searches on my credit file. At the same time, I don't want to pay off my student loan if it's not necessary, as that will mean I won't have my full deposit for a good 4 months later than planned.

Unfortunately the broker I spoke to seems to have moved on, so I will have to start again with someone new.

trakky14

I would say speak to a broker or a lender directly, the calculators are not all that! We got quoted the ability to borrow £173k on a calculator and the lender was happy to go to £270k! Better speaking to someone in person

elverson

Also, when it comes to an application your lender will want to see your payslips (and therefore will see the SLC deductions).

littlegreenfrog_2

Yes, I wasn't planning to try and conceal the student loan or anything like that. It's just that if it makes a big difference to how much I can borrow then I might be better off saving for a few more months and paying off the student loan early in a lump sum so I can borrow more.

littlegreenfrog_2

Barring any unforeseen circumstances I will pay off the student loan within 2 years if I just continue with the standard PAYE deductions.