FIRST TIME BUYER - loan application before mortgage?

johnnybrando

Hi, I am a first time buyer looking to buy in the next few months. I just about have the 5% deposit needed, but don't quite have money for fees, and things for when I move, appliances etc depending on the house. I would like to (and can afford) get a small loan to help me, but will this cause probs with my mortgage application? I have about £1000 debt on a credit card so would clear this with the loan, but otherwise I have no debts. I earn £36k and the houses Im looking at I can afford both mortgage and loan (3 years probably) quite comfortably. Im worried though that it will cause problems with my mortgage application, but the only option is to wait 12-18 months if I don't get it? I would also like to switch banks to take advantage of the cash bonuses on offer, but again I think this would go against me. Any advice please? Cheers

Debtslayer

You'd be mad to apply for a loan before mortgage, you need to save enough for deposit (ideally 10% to get better mortgage rates) and enough to pay fees etc. Applying for any new credit before will affect mortgage application
Save for the extra 12-18 months if that's what it's going to take.

csgohan4

any loan will effect your affordability like debt does. If you can't afford the fees, you can't afford a house at the moment. Save up. Try not to apply for new bank accounts within 6months of applying either as it will effect your credit history

sjb2812

Debtslayer wrote: »

... Applying for any new credit before will affect mortgage application .

Piggy-backing a little - does this also apply to any increase that a credit card company has applied simply after a review of the file (not asked for by the individual) - My CC limit has increased 25% (possibly as I applied for DIP with the same bank as that which I have a CC after going through a broker). I did query this with the bank at the time but they advised it would not be a hard check on my record.

johnnybrando

Cheers guys

Supersaver88

Paying a credit card debt with a loan debt doesn’t compute isn’t really paying of debt at all, it’s just clearing a debt with more debt.
Save the money up Johnny, it will take a bit longer but will be worth it in the end. Tighten up your budget, kick out the ALL the stuff you don’t NEED and you’ll get there. If there is anything you want to do right the first time it’s buying a property, it can really set you up ��✊️
Good luck!