any hope?

mandi80

Hi,

We are considering relocating due to a recent job offer that would increase our income quite significantly.

This would mean taking out a new mortgage. The amount of the mortgage would be similar to now, but it would mean going through a new application.

I know that mortgage eligibility is complex, however here are some basics about us -

Joint income gross - £75K
Equity in current home - £130K
Value of new home - £260
Mortgage required for new home - £130K

But here is the problem. We are 4 months in to a debt free journey. We have paid off almost £8k since the end of the May but our unsecured debts are still just over 50K. We learnt a lesson with this a while ago and have not used any form of credit since the start of this year. We would continue with the debt repayment when/if we move and we don;t want to use the equity to clear our unsecured debts as most of it is either interest free, or at a competitive rate.

We have no late payments or defaults etc.

Would we have any chance of getting a new mortgage or would our level of debts automatically lead to a rejection?

The affordability calculators suggest that it;s possible, and the cost of the new mortgage would be in line with what we pay now. We are looking for a house that we can move into without the need to do major DIY, so we don;'t need to worry about this cost.

The new job would increase our income by 10K ( gross) per year, plus it's an area that we would like to live in. Are we being naive in thinking that this could work out for us?

ACG

I think you will be fine in principle. There will be lenders who will decline you outright, there are lenders who will also make an absolute meal of it and there are lenders who will probably let this fly through without touching the sides.

The chances of the latter is probably limited to maybe 2 lenders but there is no reason for you to not be able to get a normal rate Mortgage.

I think you could do this on your own without a broker if that is what you want. But I think there are probably worse ways to spend your money than using a broker in this instance.

mandi80

ACG wrote: »

I think you will be fine in principle. There will be lenders who will decline you outright, there are lenders who will also make an absolute meal of it and there are lenders who will probably let this fly through without touching the sides.

The chances of the latter is probably limited to maybe 2 lenders but there is no reason for you to not be able to get a normal rate Mortgage.

I think you could do this on your own without a broker if that is what you want. But I think there are probably worse ways to spend your money than using a broker in this instance.

Thank you- so do you agree that not adding the unsecured debt is the way to go?

ACG

When we speak to a customer we go through a "factfind". One of those pages is all to do with what the customer would like from their Mortgage.

I do not want to say it is the best (or worst) way, but if it is your preferred option it is feasible and as a broker I would be comfortable doing it either way on the face of it.

enthusiasticsaver

You might be ok as the £75k income is more than enough for a £130k mortgage and you will have a 50% LTV. A broker might be the way to go as they will know lenders who aren't put off by your level of unsecured debt.

mandi80

dh is keen to include the unsecured debt in the new mortgage but I am dead against it. We can pay off the unsecured debt over the next 3-4 years without having to extend the mortgage. I have a real issue with putting our home at risk.

Despite the level of unsecured debts, I am not really stressed or worried about any of it. We are paying it off and the balance is dropping month on month. My husband is a bit different and just wants it to disappear.

ACG

Could you not overpay on your Mortgage each month by the amount you are paying on the loan for the next 3-4 years, chances are you will be in a better position so you both get what you want to some extent.