Paying off loan & mortgage

Futuristic

I'm looking at purchasing new build but have 9k/25k loan remaining to pay off. The development is selling fast and mostly all ready to move in within months.

If I settle loan can I get mortgage within 1-2 months or I need to wait couple of months after paying off loan?

My credit "score" on the big 3 are all green and above area average. I understand this is partially meaningless but gives some guidance. No bad debt ever and loan has been paid on time each month.

Arleen

It's not partially meaningless, it's outright pointless and offers no guidance. I had better score right after moving to the UK than I have now, with years of perfectly managed accounts (although It is rather cold for last few days and I moved in close to summer, so results are highly biased).

And if you have the money in the bank to repay it, why not do it now anyway, just to pay less interest on it?

Whether you will get a mortgage or not depends strictly whether you pass their criteria, including affordability, so I can't see how paying off a loan would not help - assuming that you still will have enough for a deposit.

Futuristic

Arleen wrote: »

It's not partially meaningless, it's outright pointless and offers no guidance. I had better score right after moving to the UK than I have now, with years of perfectly managed accounts (although It is rather cold for last few days and I moved in close to summer, so results are highly biased).

And if you have the money in the bank to repay it, why not do it now anyway, just to pay less interest on it?

Whether you will get a mortgage or not depends strictly whether you pass their criteria, including affordability, so I can't see how paying off a loan would not help - assuming that you still will have enough for a deposit.

I've been clearing it in £5k payments every few months and now I'm in a significantly better position.

I'm just more concerned of the timeline of trying to get mortgage so soon after paying the loan. Money from now luckily isn't a issue with a secure & very well paid job.

Will definitely clear it tomorrow morning in full regardless and get into discussions with the developers

Arleen

Well, nobody really knows as the criteria are a well guarded secret. But there is little harm in chatting up a broker and see what they will suggest.

[Deleted User]

Pay off the loan then use a "whole of market" mortgage broker they have access to lots of deals