Mortgage - where to apply having an outstanding loan?

ilikepancakes

I'm looking for advice what to do.
Me and my partners are FTB, we had our offer accepted and solicitors instructed 2 months ago. Now we have to apply for the mortgage as we had to wait till my partner receive 12th payslip to be eligible for a mortgage (she is on zero hour contract).
At the moment I have outstanding £3.4k personal loan that ends in February - repayment £500 per month.
As we had a lot of time to think about the mortgage we had a meeting with Lloyds mortgage advisor, we have one scheduled with Sandander in couple of days, we had contacted L&C and also I have contacted one of the Mortgage Advisers present on this forum.

Lloyds is ok with the loan and our eligibility was around £260k, we need £242k mortgage. But the rate offered by Lloyds is big as it is 3.45% which comes to £1080 monthly payment.

Mortgage Advisor from this forum was honest and told me that I should first meet with Santander and start working with him only if we do not proceed with Santander as he would charge somenthing even if we won't proceed with the mortgage he will find.

Santander: We already had a meeting with Santander around 2 months ago and as I remember they were ok with the loan but I'm not sure. Next meeting in 2 weeks.

L&C said that there is no eligibility for us at all because of outstanding Loan, if we pay it off they would be able to find a lender for us.

And here I am thinking what to do:

1. Stick to Lloyds and pay £1080 per month
2. Pay off the loan with the money (savings) from overseas and proceed with L&C? Would it cause any problem? Would it be questioned by bank where does the money come from or something?
I think L&C would find a mortgage with around £1020 monthly payment, so in 2 years we would save ~£1440.
3. Proceed with Mortgage Adviser from the forum, pay the fee and hope there is no need to repay the loan immediately.

there is also another factor, which is not big but still. We had a plan to refurbish the bathroom with overseas savings but if we use them to pay off the loan we would not be able to refurbish it anymore. Or we can pay more going with LLoyds and then refurbish the bathroom :mad:
Good thing about refurbishing is that would be my partner's brother who do the work so it would be dirty cheap and we can only do it before we move in. Once we move in we won't be able to refurbish it after let's say 6 months.

What should we do?
Thanks

foxy-stoat

Clear the loan first, use the broker and get the best rate deal you can - you will save the most money this way and go into your first mortgage with no unsecured debt.

Save for the bathroom refurb, assuming you can use it in the mean time.

ilikepancakes

Would there be a problem if I clear the loan with the money from outside the country?

Thrugelmir

There's no rules on how you spend your own money. Little point in paying interest on debt owed unneccessarily.

ilikepancakes

it's not about how I spend my money, I am concerned about bank asking for a proof where do I get my money from, like it is with the deposit.
If they ask me for some documentation from abroad, then to translate it and god knows what else, then I would probably prefer to pay couple of pounds more and exchange my contracts instead of keeping the sale postponed because of £2k pounds

scholesfan88

I honestly fail to see how L&C cant find you a product when 2 high street lenders say that you meet their criteria.

Try MortgageGym. I'm going through something half similar at the moment and they've been nothing short of great for me, I've just had my mortgage offer through today. Their website gives you an eligibility score with the suitable lenders too, so even if you dont use them you may get a feel of lenders you may want to approach.

Crumble2018

I don't have your issue with Zero hours contracts, but we got a mortgage with Nationwide with a much larger outstanding loan and 2 car finances. Find a decent broker!

ilikepancakes

L&C told me one hour ago that with my loan paid off our affordability is £235k. When I did the assessment on their website it was £262 withoud the loan and around £240 with the loan.
Talked with the mortgage advisor from Lloyds an hour ago and without the loan affordability is £241800

MortgageGym shows that Barclay, Santander, Halifax and 4 more less know banks would lend us but there was no way of saying that my partner has 2 jobs which one of it is zero-hour contract and this may make the difference.

I have scheduled a call with them, if thay can't find anything then I will have to go with Lloyds or Santander

MovingForwards

L&C only like straight forward cases, anything non-standard takes time to place which they don't have the time to do. It's conveyerbelt work work L&C do, pile high, and simple cases.

csgohan4

For your biggest purchase in your life, best to get it right first time. You get what you pay for with conveyor belt brokers like L+C.


For easy cases usually no issues, but anything other than that your on the back burner


I am surprised your vendor has been patient so far with no mortgage offer

amnblog

I am a little bit baffled here?

Why are you now on your fifth route to a suitable solution? If you want this handled properly use a sensible Broker which I imagine my colleague from this Forum is.

Running down multiple channels is the worst approach you can take.