applying for a mtg...car finance vs personal loan?

itguy81

Hello,

My wife and I are looking to buy a house within the next year or so.

We have so far saved roughly 5% deposit and fees for the house prices we are looking at but are continuing to save more so that we move with some savings or we could possibly then offer 10%.
All credit referencing is prefect etc.

We currently have a car on finance have only had the agrement 8 months ago.

My question is: Do lenders look more favourably on secured debt VS personal debt?

Fully aware this isnt the best thing to have when appying for a mtg but it will be well over a year into the agreement when we come to apply. We are hoping to chip away at the balance over the next 12 months too.

We have added this into different calculators and we can still easily borrow the amount we are hoping to buy a house for. (we want to borrow £135-£150k but could borrow upto £180k on some calculators).

This could possibly a pointless question and either type of debt could be just as bad as the other.
Just something we have recently questioned!

Thank you for any feedback, it would be really appreciated.

Neutrinno

No they treat them the same and will look at the monthly repayments when calculating affordability, whether that's a personal car loan or a hire purchase agreement secured against the car.