Car loan and mortgage

grantwal

Hi So just looking for advice on weather a car loan is the right option. So after having my car I. The garage it’s going to cost me 4x what it is worth to fix it, so I’m now having to buy a new used car and I’m wondering if trying to get a car loan or finance will hurt my chances of a mortgage in around 4-6 months. I do usually buy my cars in full, but every penny has been going into a deposit for a house.
any advice would be great thanks 

Grumpy_chap

First off, what is the current car, age, mileage, and what is wrong with it that is going to cost so much to keep it going?  It may be possible to find a route forward that won't need you to spend on a new car.

Second, any loan now will have some impact on a mortgage in the next few months as, at the very least, it will affect affordability assessment.  If you can get the house first and then the car that could be better in the long term.

Thirdly, I would suggest spending as little as you can on a car ahead of buying a house.  Partly, there are lots of "extra" costs that come up when buying a house, so keeping as much funding available as possible is helpful.  Also, you don't want to spend £5k on a car and then be £5k short of that "dream house" when you find it.

Nearlyold

If you can possibly avoid the need for a loan before completing on a house purchase then you should do so.

NB The nice salesman at a dealership may tell you a mortgage lender will somehow ignore an HP based loan in assessing what mortgage they'd be prepared to grant you because HP is secured on the car -  unfortunately while some salesman might actually believe it, its utter nonsense.

MinuteNoodles

So the solution to a repair bill of say £1000 is to spend £4000 on another car (never made any sense to me either) and at a time when you're thinking of getting a mortgage? Whatever you borrow will reduce how much a mortgage company will lend you.