HTB / FTB / paying off debt before completion

rachaelftbhtb

My partner and I are first time buyers and are currently applying for help to buy and a mortgage on a new build home, we are using a mortgage advisor.
On my own, I currently have a £9,000 loan and £1,000 on a credit card which will both be paid off before mortgage completion – will lenders take this into account when looking at our affordability for a mortgage?
The only other financial commitment will be a hire purchase – currently in my name, but we both pay this.
At what stage will lenders look at our bank statements? Will it go against us if I’ve been in my arranged overdraft (this has been paid off in full each month)
We have both been very stressed and worried this weekend at the possibility of being rejected.

Thanks in advance :beer:

Exodi

rachaelftbhtb wrote: »

My partner and I are first time buyers and are currently applying for help to buy and a mortgage on a new build home, we are using a mortgage advisor.
On my own, I currently have a £9,000 loan and £1,000 on a credit card which will both be paid off before mortgage completion – will lenders take this into account when looking at our affordability for a mortgage? - Yes they'll take this into account for affordability. Without knowing your income, outgoings, financial circumstances, etc it's difficult to say whether this will be an issue. If you are able to pay it off before completion then probably not.
The only other financial commitment will be a hire purchase – currently in my name, but we both pay this.
At what stage will lenders look at our bank statements? Will it go against us if I’ve been in my arranged overdraft (this has been paid off in full each month) - These would be seen early on before issuing a mortgage offer. If you're applying through a MA, they should know these details before choosing their lender.
We have both been very stressed and worried this weekend at the possibility of being rejected.

Thanks in advance :beer:

Answers in red. If you're applying through a MA you should be OK (as long as they're aware) as it's not in their interests to apply for mortgages you won't get.

I wouldn't worry personally.

kingstreet

When credit is to be repaid on or before completion, most lenders will ignore it for affordability. One or two will take it into account. Of the ones that ignore it, some will want evidence of the repayment funds now.

Many lenders don't ask for bank statements. Those that do are looking for undisclosed expenditure on credit.

Occasional use of a small authorised overdraft will have no impact.