Days away from mortgage submission, will applying for a personal loan effect my application negative

jamieh1985

For context, I currently have £65k worth of debt, with 7.9% and 11.9% interest with two separate lenders. I am still able to afford a mortgage, but I would like to get my % down and would be able to get 2 new loads at the rate of 3% saving myself quite a bit of money.

Would these new loan applications to consolidate interest rate effect my application? In theory my payments would actually be reduced due to this.

Cheers guys for any help

rade84a

I would wait until you have your mortgage credit checks can be tough (from personal experience) so I wouldn’t recommend getting any additional borrowing just before applying for a mortgage.

csgohan4

any debt will affect affordability, generally can only borrow x4.5 of your gross income not including debt.


You have a lot of debt, I hope you have a high enough income/ Deposit to compensate

Kentish_Dave

How do you know you’d get those rates? You only know the rate at the end of the application, and unless you on on hundreds of thousands of pounds a year then it’ll be hard to get the representative rate.

AnotherJoe

First, I suspect you won't get those loans at a rate of 3%, second you may be very optimistic about getting them at all and third even if you get the new loans, due to the way these things work you might end up showing as having 4 loans not 2 and thus double the amount of debt. So I suggest you don't do that until you've got the new mortgage and are in your new house.