How does debt affect potential mortgage?

Bluelala

Hi, I know this is a bit of a vague question and there are lots of variables which could potentially affect a mortgage but how much does debt impact your affordability checks? We have around £15k of debt, would this be a big no no and are we better off holding tight to get this paid off as quickly as possible before even considering getting our house valued?

HappyMJ

Bluelala wrote: »

Hi, I know this is a bit of a vague question and there are lots of variables which could potentially affect a mortgage but how much does debt impact your affordability checks? We have around £15k of debt, would this be a big no no and are we better off holding tight to get this paid off as quickly as possible before even considering getting our house valued?

If you're remortgaging the property it shouldn't affect your affordability too much.

It's not a "big" no. They just look and see whether you can afford to pay the debts and the mortgage. As you've already got a mortgage you "should" be fine. Most people do have some credit cards with outstanding balances and some have car loans and they can remortgage just fine.

David_White

It could have an impact on the amount you can borrow, but to give a true answer you'd need someone to fully assess your income, expenditure, amount you wish to borrow etc.

If you're trying to borrowing as much as possible on your income then it could be an issue, however if you're borrowing a relatively small amount compared to your income then not so much.

One thing worth mentioning is no lender will particularly like you being up to the limit on credit cards if this is the case.

Thrugelmir

Lenders will also see what your debt peaked at. £15k is only the balance as of today. Many facets are taken into account when credit profiling applicants.