First time buyer mortgage - help!

Kcaj94

Basically I am looking to buy my first property and have seen a new build property I like.

The value of the property is £139,500 and when taking into account the deposit I have and the loan I can get from the government under the help to buy equity loan scheme I require a mortgage of 100k.

I am in full time work earning 25k a year however the stumbling block is that I have a car loan of 4k.

A lot of people are saying I may as well kiss goodbye to getting a mortgage due to my loan - is this really the case? Is it impossible to get a first time buyer mortgage if you already have a loan?

In today's climate considering how difficult it is to get on the property ladder I will be gutted of my loan will stop me from getting this place.

Thanks guys

juniordoc

That is a pretty hefty loan for a car considering your income. How quickly are you paying back the loan? You may need to keep saving more deposit to offset the risk of your loan.

ACG

It is not really the size of the loan that is the issue, it is the repayments.

When you say a lot of people are telling you it can not be done, are any of those people Mortgage Brokers? It might be worth speaking to one if not.

Kcaj94

Thanks guys.

The repayments are £120 per month.

kingstreet

Put the payments in different online lender affordability calculators and see the difference to your borrowing power.

It may make no difference at all as HTB - EL has an income cap of 4.5x.

Sazzy7

yes use their calculator, it will tell you if your salary, deposit and current outgoings mean you can afford the mortgage.

Caraway90

I wouldn't say it's impossible just because of the loan. My partner has a car loan, £205 a month, and we had no problem getting a mortgage. Yes they take it into account and maybe we could have borrowed more if he didn't have it, but lenders will lend what they think is affordable.

marliepanda

juniordoc wrote: »

That is a pretty hefty loan for a car considering your income. How quickly are you paying back the loan? You may need to keep saving more deposit to offset the risk of your loan.

A 4k loan on 25k is hefty?

£120 a month out of a 25k income is hefty?

Dear me.

ashe

marliepanda wrote: »

A 4k loan on 25k is hefty?

£120 a month out of a 25k income is hefty?

Dear me.

Glad its not just me, I had to read that again a few times.

letitbe90

ashe wrote: »

Glad its not just me, I had to read that again a few times.

Haha yep same here. You'll be fine mate. They may ask you to potentially take out a 30 year mortgage rather than a 25 year mortgage to pass an interest rate stress test, but I reckon you'll be fine.

Saying that, you are close to the limit of 4.5x your salary (+ factor in an existing commitment), and I hear a lot of banks don't favour new builds - could be they come back to say they can only offer 85-90k instead?

Sir_Robin

Sounds like a long shot on that income.
If you got student loans etc combined with the car loan it might cause you to fail the affordability check. Always worth trying though.