Big Loan , Mortgage advice

whunt18885

Hi

My wife and I are looking to move, We already have a AIP with our current mortgage provider (TSB). Concerned about our chances - Here is our info maybe someone can give me their gut feeling.

I have about £12k on a low interest post office loan and a few £k on a credit card - I have 3 C.Cards, one has about 90% full (because its interest free for 2 years) and of the other 2 one has a empty balance (£4k limit) and the other £750 (£7.4k limit) so I have utilised far less than 50% of my available C. Card available balance.

My missus has been far more sensible so she has a small car loan (Interest free with TSB £4k remaining) and a small £1k C.Card debt - She has 2 c.cards, One has 25% full (£1k of £4k available) and the other is £0 (of £2k available).

We both have good credit scores , Mine is 899 and hers is about 910 and we both have proven history with TSB - None of us have ever missed a payment for anything. Obviously we are on the electoral register etc.

In terms of income I have just accepted a new job of £18.5k a year (TSB said they would accept offer of employment letter as proof) and I also have paperwork for the previous company I worked for (with them for 8 years), My misses has just had a promotion so her salary has jumped to £23k a year.

With that in mind our combined income is about £41.5k a year and our combined expenditure (not including food/utility bills just mortgage / loan / c.cards etc) is about £1000-£1200 a month so on paper if they look at our combined incomes we clear nearly £3k after tax a month. Our new place would mean a loan of £144k (88% LTV) and repayments of about £500 a month over 32 years.

TSB AIP (done only a few months ago but based on missus pre-promotion wage of £20k) offered us up to £173k so we are asking for far less than max.

Also bear in mind our current mortgage is already with TSB and they can see we have never missed a payment since we had it (several years ago) and also the misses has a £5k ISA (if needs be we can use this if required for loan / more deposit etc but want to keep it in ISA to preserve bonus interest when it matures)

Given all the above - As a total gut feeling can you offer feelings on the below:

1. Are we likely to get approved when they use the AIP to do a hard search (We have excellent credit scores and combined total income showing we could pay mortgage 3-4 x over over each month) ?

2. Do they asses / make a decision based on combined exposure / debt (given its a normal joint application) or does my higher loan mean its going to screw it up ?

Obviously I am aware its also based on their survey being happy with the house etc but as its a new house and its been independently valued showing its worth what we say it is don't think that will be an issue.

I am sure I am freaking out for no reason - Surely people with £10-15k of loans get mortgages all the time - I feel a bit better knowing that both our credit scores are really good and our combined income shows we could technically pay the mortgage off in 10 years but even still I am still really worried.

One would assume that the fact we got a AIP should at least mean we are likely to be accepted ?

Advice please ?

Sorry for long message!

ACG

Some lenders would decline you outright because you have debt almost to the tune of your annual income. I do not know what TSBs stance is but presumably it was all entered on the AIP so you would assume they do not have a debt to income rule or if they do, you are within in?

Everything you have mentioned I would expect to have been picked up at AIP stage.

whunt18885

Thanks for the advice

whunt18885

Even tho my debt is not far of my annual income do they not base the decision on the combined as we are a joint application? i.e Do they not base it on a income of £41.5k rather than (£23 + £18.5) ?

ACG

Im not sure with TSB, they may not have a debt to income rule at all, not all lenders do.
Some lenders would link your debt to your income, others would just take the application as a whole, some lenders work off the repayments compared to monthly salary rather than balance to annual income - different lenders have different outlooks. That is why people who get declined with one lender can be accepted elsewhere.