loans and mortgages

stephen.rooke

Hi,

I'm planning on getting buying my first property shortly after Christmas. Deposit is in place, i have a good income and have completed a few decision in principles (soft search ones) and they suggest the banks will offer more than i need and i also have an excellent credit score according to experian (no missed payments and pay more than the min on cards).

my question is, i currently have a loan which i'm vastly overpaying to get rid of it. if at the time i want to apply for a mortgage and theirs say 1 or 2 payments left would this affect the affordability assessment or would the banks be o.k as its nearly gone.

I'm thinking i need to wait a an extra month or 2 but keen to get going. thanks in advance

Thrugelmir

For the sake of 1 or 2 months repayments why not simply clear the debt now from your savings. You'll soon recoup the outlay. Property market tends to be slow immediately after Xmas. You may find that you've more time you imagine.

KnowledgeIsLife

I agree you would be best off clearing the loan early with your savings and the payments you usually make put back into your savings plus you would be saving interest by clearing it early no doubt.

bbuckle

My lender was happy with me paying my loan (with them) off on completion, so it didn't actually figure in the affordability calculation. Not saying that this is the norm, but it wasn't a huge issue for me.

ACG

Most lenders are happy to ignore if there are less than 6 months to run.
However there are 2 I can think of who would assume that they will remain/be replaced if they have not been cleared and updated on your credit report. If affordability is fine with the loans, then it would not matter anyway.

stephen.rooke

hello again, spoke to a mortage advisor and he advised aswel that most would ignore if less than 6 months to go but that the credit check they would do needs to reflect the period.

quick question, if the loan is something i'm overpaying, so i get to 6 months payments remaining before the actual date which would have been 6 months to go on the loan (e.g) paying double each month. would they still ignore this? value remaining on the credit report would be less than half the initial amount if you work out the standard payments it would work out less than 6 month. but not be past the half way mark in terms of the time the agreement was supposed to run.

I'll contact the mortgage advisor again just wondering if anyone on here knew while i'm browsing and trying to sort a few things tonight.