Moving Home - new job - Mortgage.

JP1978

We are looking to move house in the next wee while, but have a few issues that may stop us getting a mortgage....wondered how these would affect us.

Although I have been in some kind of employment for the past 32 years, I have have been working as a mix of contracting and PAYE. Ive only been out of work for approx 6 months in that 32 years. Luckily the industry I work in is busy and it its very close knit and so finding work is generally through word of mouth through contacts.

Anyway, been PAYE for only 4 months but was contracting to that company for 10 months before that. My salary is just short of £60k, wife works part time on a 0 hours contract but is approx £8k (since been there she has not worked less than 20 hours and is always been asked to work more hours)

Adding that to the below, wondered what the chances of a mortgage are:

CC Balance of £2100
Overdraft of £3000
Two car HP's totalling £700 (one ends in 12 months so £3000 balance ish)

We estimate we have 40k of equity in the current house and looking to get a property worth £200k. If we use 10k of the equity to clear off the CC,Overdraft and one of the car HP's, that would only leave us £400 of HP. We have been eating into the CC balance in the last few months (as the most expensive).

We were thinking that we should go to a broker/adviser rather than just to one bank.

Any thoughts, is using the equity to clear the minor debt a valid and accepted option?

SavingSteve

"We were thinking that we should go to a broker/adviser rather than just to one bank."

Definitely what you should do,they'll be best placed to find a lender who will work with you.

Also, no mention of savings, so is the equity all you have to play with? You'll therefore also need the equity for stamp duty, legal fees, valuations etc.

Speak with the broker about paying off the debt. Sounds like the right thing, but if it puts you into a different LTV bracket you may be better off keeping it.

JP1978

Many thanks.

Yes, been in touch with a broker and our plan seems acceptable and have a MIP from our existing lender.

Had a local and knowledgeable estate agent to look at our house and they seem to think the sale price will give us £44k ish of equity.

JP1978

Update - mortgage has been approved (from a financial perspective, just waiting on the survey etc).

Turns out the house sold for more than we expected - so have about £47k of equity. Plus we are getting a gift of £7k from family.