Debt and Mortgage Application

ronny147

Out of interest, i know that large credit commitments mean that you will be offered less of a mortgage - so when you do the online application or one through a broker you declare the extent of these.

This limits the amount of mortgage you can get. When you make the application you may still have these hefty monthly payments.

But what if through the sale you pay off all your debt but obviously have already put through your app for the new home.

Is there anyway of circumventing this

Thrugelmir

Is your question that you have no intention of repaying your debts and actually wish to borrow more?

System

To me it sounds like wanting to sale and purchase chain free; if only we all could...

ronny147

Yes.

Have a good salary but would need extra mortgage to get the type of house we need. Credit card debt lowers amount you can borrow and you have to mention it when applying. But in reality it wont be there when first mortgage payment is due.

Not everyone gets an inheritance or bank of mum or dad and with the market the way it is high mortgage debt is there

System

Perhaps its worth renting briefly if chain free adds enough value? Not ideal at all I know...
Or putting everything into storage and living on a friends sofa for a bit

System

Or if you move out, and get permission to let, then it won't detract from your affordability the same way a residential mortgage would

ronny147

Not sure what peoplr mean by chain free. I was talking about the debt you have when applying for mortgage (debt that wont be there when mortgage starts)

Thrugelmir

Why not simply wait a couple more months. Clear the debt before applying.

System

I assumed it was mortgage debt that would've been cleared by the sale

Chain free means the sale doesn't depend on another property

Current mortgage will be repaid in a chained sale and purchase and in that case won't count. Perhaps remortgage to clear other debts first

An affordability calculator online will tell you how the debt affects you, lenders vary wildly

ronny147

Will sell flat and use proceeds to put forward a deposit for new home and use excess to clear debt.

But in organising new home mortgage will have to put in monthly payments for debt which wont be payable once mortgage starts.

But the fact we have the debt now affects how much bank can lend even though it will not be relevant when new mortgage starts

jan875

Some lenders allow you to declare this when completing affordability checks. You should be able to differentiate between debt that will be re repaid upon completion of the new mortgage and debt that will remain.