Best to repay debts before arranging mortgage?

Jane._Worried

I would use an independent advisor.
I’ve just put a full application in via my MA.
We have a couple of small debts which doesn’t affect affordability and have a 55% deposit.
BUT we have a pretty poor credit rating, CCJ which is cleared, pay day loans, late payments.
You name it we’ve had it!
My MA was aware of all of this right from the beginning so he got all our info right from the start which he could then use to find a company suitable for adverse credit.
You’re obviously not in the same position as me but just feel like a good adviser (whole of the market) will know your best options before applying.
We got a DIP same day it was put in (not referred)
Full application gone in and lender said all looks ok just waiting on underwriters now so fingers crossed.

haras_nosirrah

In terms of brokers a typical fee is around £300-500 but you will get a hand held service (we fill out the help to buy form and deal with the agent there as well as the lender and the estate agent)

The free conveyor belt brokers don't have time for hand holding so it depends if you want the extra support and are prepared to pay a fee to receive it.

In terms of the debt as above says it depends on if it is needing to be cleared for affordability. Lenders are increasingly erring on the side of caution and still counting it even if planning on clearing it. If you need to clear it for affordability and want a choice of all lenders then clear it upfront. If you don't need you clear it for affordability then it won't make a difference.

Jane._Worried

haras_nosirrah wrote: »

In terms of brokers a typical fee is around £300-500 but you will get a hand held service (we fill out the help to buy form and deal with the agent there as well as the lender and the estate agent)

The free conveyor belt brokers don't have time for hand holding so it depends if you want the extra support and are prepared to pay a fee to receive it.

In terms of the debt as above says it depends on if it is needing to be cleared for affordability. Lenders are increasingly erring on the side of caution and still counting it even if planning on clearing it. If you need to clear it for affordability and want a choice of all lenders then clear it upfront. If you don't need you clear it for affordability then it won't make a difference.

Totally agree, my MA has been worth his weight in gold.
We’ve got adverse credit and he is hand holding us through the whole process, when he knows something regards our application then we know straight away.
I know your not in the same situation as us but even if I was in a better situation I wouldn’t hesitate to pay (we’re paying £400) for his help.
I got refused a mortgage 6 months ago because the “free” broker didn’t check everything properly and rushed.
Hope this helps.

spokenivandrago

Please, do not buy a house while you are in debt. Take a little more time and get your finances in order. Pay off all of your debt and have all money saved for moving fee's, furniture and immediate improvements. Also have a few thousand saved in an emergency fund. If you take a few months to do all of this you will be far happier and wont be starting out on the backwards foot.


The fact that affordability has been mentioned due to these debts is hugely significant. I am 36 and wish someone had given me this advice when I was starting out. You will forever be chasing your tails otherwise. best of luck. Have a look a Dave Ramsey, he speaks a lot of sense.