Paying off debt when moving with equity

MortgageHelp1984

Hi everyone, I need some advice please...

I need to move to a bigger home as my family is about to grow and due to work situation.

My current outstanding mortgage is £85k, have an offer on my house for £133k meaning I have £48k equity.

The house I want to move to is £230k (Might get it for £225k), I have outstanding card and loan debts of £20k and am struggling to get over the line on affordability calculators due to amount of debt.

Question - is it an option to use £20k equity to clear these debts on the sale of our house and then put down a 10% deposit on new place, leaving £5k for fees and moving costs? Will mortgage companies accept this as a method?

Thanks in advance

Thrugelmir

If you are struggling to manage your finances now. Lenders might not be keen on allowing you to double the size of your mortgage debt. As doesn't address the underlying causes.

MortgageHelp1984

Thanks for the judgemental response and assumption, I am not struggling to manage my debt, the cards are on 0% as I manage them with balance transfers, I never miss a payment, I have a high level of card and loan debt due to the recent renovation I have done on the house, hence the equity, the next house is one I can just move into and not have to touch.

Can anyone else provide some sensible advice please?

dimbo61

Well lenders normally ask for last 3 months bank statements and ask about outstanding debts
IE the loans and credit cards debts which you used to renovate the property.
However you have alot of debts and little equity when you clear that debt.
If you have a good income to support a £200,000 mortgage and 10% deposit plus other costs you might find a lender.
Think you need a broker to help you find a suitable lender

Thrugelmir

MortgageHelp1984 wrote: »

Thanks for the judgemental response and assumption, I am not struggling to manage my debt, the cards are on 0% as I manage them with balance transfers, I never miss a payment, I have a high level of card and loan debt due to the recent renovation I have done on the house, hence the equity, the next house is one I can just move into and not have to touch.

Can anyone else provide some sensible advice please?

Nothing judgemental I can assure you of that. Decisions are based on cold hard facts. Speak to a broker to guide you to the right lender.

amnblog

Yes, you should be able to do that with the right lender.