Will this debt stop us from getting a mortgage?

Sam80

Hi,

My partner and I need to relocate fairly soon due to work. We don't want to continue renting we are approaching 30 and want to lay down some roots.

We currently owe about 12K on 0% credit cards. It was higher but we have paid a lot off over the last 2 years. We are up to date with all payments and have never been late paying, or in arrears.

Our joint income is around 75K and my partners parents have offered to gift us 30k for a deposit on the condition that this is used for a deposit and not to pay down the . I know that using the money to clear the debt would make more sense but it is their money and I feel that I have to respect this and be grateful.

Would this debt be a huge issue when applying for a mortgage? We are looking to borrow around 200K

Zeebs90

We have about 5k between us on cards and have had a mortgage approved, I think they just factor in the repayment into affordability calculations.

Anzhelka

They usually calculating minimum monthly payment, when doing your affordability check. So if you have a good income you shouldn't be really worried. I would rather use this money as deposit, but it's only my opinion.

amnblog

Doesn't sound like a deal breaker to me. But on the kind of net income you are enjoying there should be more cash and less debt around. Address your general spending before you commit to a mortgage.

rtho782

We've just borrowed £218k on a 59k joint salary (we actually have a 70k joint salary but it was easier not to take my self employed income into account as I don't have 3 years accounts).

Given that you have £16k more joint income, I can't see the credit card debt being an issue.

On the other hand, you should be able to pay off £12k in 6 months or so if you really put your mind to it

Sam80

amnblog wrote: »

Doesn't sound like a deal breaker to me. But on the kind of net income you are enjoying there should be more cash and less debt around. Address your general spending before you commit to a mortgage.

HI

We have been paying off debts with spare cash to get ourselves into a better situation. We would like to have paid it all off before applying but we have simply run out of time! Our debts 5 years ago were more like 40K!! We have worked hard to reduce this and to develop better spending habits.

MortgageMamma

Sam80 wrote: »

HI

We have been paying off debts with spare cash to get ourselves into a better situation. We would like to have paid it all off before applying but we have simply run out of time! Our debts 5 years ago were more like 40K!! We have worked hard to reduce this and to develop better spending habits.

Well done for paying the debts down. Regarding mortgage affordability, you need to get an affordability assessment and some proper advice before you even look at a house to buy. Best place for that is a whole of market mortgage broker. By taking the advice route you will be able to obtain a "decision in principle" which is a basic check done by a lender on your income/outgoings/credit and it will tell you how much you can borrow.