First time buyer with debt

thepod

Hi all,
Could really do with some advice.
My wife and I are looking to buy in a years time and have a healthy deposit and are in the H2B scheme too. I am concerned that we will struggle to get a mortgage as I will have around 10,000 debt (car finance) is this generally a big deal? Can anyone give me any words of wisdom or advice? I have a good/excellent credit rating and have never missed a payment. I do however have a credit card debt of about 5000 interest free which I am paying off large amounts each motnh and will be done with in about 15 months. Any words of wisdom would really help.

Mortgagewanted2016

I have car finance (12k outstanding) we also had a 10k loan and 5k in credit card debt, we were asked to clear the loan balance, clear the credit cards and the car finance was allowed to remain, I guess it all depends on affordability, if your salary is high enough to pass affordability with the car finance and CC payments I don't see an issue, best bet would always be to clear what you can before application though... We had 50k deposit for a £290k purchase (60k salary) and we just about scraped affordability and credit file wasn't as good as you say yours is.

Debtslayer

It depends on other factors such as salaries and outgoings.
You say you will have 10k car finance, does that mean you have finance now or something you will havd by next year? If you don't have if now then personally I wouldn't do it; I'd make sure I'd get a house first before anything else.
Don't forget the level of debt can affect how much you can borrow quite significantly.
So other things you need to tell us so the brokers on here will be able to advise better:
Salaries
Deposit amount
Outgoings
Any dependants?
Total amount of debt
What property prices are you looking at?

cahillg81

It's all about disposable income and it's very difficult to look to far in advance at the moment as to what will be available in 12 months time.

Post MMR in many circumstances affordability has come down, but that is not always the case, and who knows what the situation will be when you intend on buying.

You can check affordability on the lenders websites, each individual lender will have different criteria, I think from what I am hearing Halifax/Woolwich are best lenders at the moment, but that can change at the drop of a hat.

I wouldn't worry about it now, I'd consult a decent broker when the time is right.