Mortgage advice...

onlyliveonce

Hi folks.
We have started looking for a new home, upsizing. We potentially have between £31000 to £40000 equity in our current home based on sales over the last 4 months. We have done a couple of mortgage AIP with high street banks all doing soft searches we could borrow anything between £105000 and £147000 based on our income/out goings, even had a large national mortgage broker onto it,  coming back with figures at £145000. Our current mortgage lender declined us for and AIP. . Areas we are looking at house prices, ranging from £110000 (needing some work done) to £135000 (not really needing anything done). 
Now we have debt between us total monthly payments of £900 (2 loans and car PCP taken over the last 6 months) our income is £3300 pm plus we have 3 kids included on our AIP applications. We are thinking of settling one of the loans with some of our equity using the rest towards deposit and home improvements to make affordability look a little better. 
Can anyone that has been in a position similar to our offer any advice, or even any brokers?

Thanks in advance.

onlyliveonce

A little bump.

Thrugelmir

The concern to your existing lender may well be how you manage your personal finances. As £900 out of £3,300 (27%) is a sizable commitment. Nor have you mentioned how much you owe on the two loans.  Were the loans a result of consolidating other debts? With the entire move  based on borrowing more and using released equity to fund "improvements". 

onlyliveonce

One of loans is debt consolidation of £13000, other contributed to our wedding of £12000 and our car on PCP.
When we say home improvements we mean decorating, carpets ideally we are after somewhere ready to move in nothing major we have all of our current white goods and furniture. We do have savings now but if we can we would like to use any equity we have to pay off one loan, deposit and redecoration.

ACG

There are a couple of lenders who need avoiding where you are clearing debt after your application goes in, in theory however it shoudl be possible.

But try and avoid doing DIPs, some of them involve full credit checks and that can harm your chances of getting a mortgage down the line.