Overpaying

Tomm6220

Hi all. Can anyone tell me if overpaying every month will help me to get a larger mortgage next year when we move to a bigger (more expensive) house ? 

Thanks 

K_S

@tomm6220 It will not. Generally speaking, the maximum that a lender will let you borrow for your new house will depend on your income, your outgoings/financial-commitments, debt, credit history and (to a lesser extent depending on the specific lender) your deposit%.

dimbo61

Do you have other debts ?
Car loans, finance on furniture/central heating etc ?
Credit cards, shopping finance !
Pay them off, make sure you don't use your overdraft, registered for council tax and elections ?
Pay all bills on time and maybe cancel the Sky cinema and sports package, dump the gym and buy a bike or running shoes. Cancel any memberships you don't really need.
I think it will help to overpay every month as it shows you can afford a bigger mortgage and your increasing your equity which might mean a better LTV on the next property.

MWT

dimbo61 said:

I think it will help to overpay every month as it shows you can afford a bigger mortgage and your increasing your equity which might mean a better LTV on the next property.

It will help to convince the borrower that a larger monthly payment is manageable, but beyond that I wouldn't expect a lender to look beyond their own affordability criteria...

Also in a case like this, increasing equity is at the cost of reducing a potential deposit so no real LTV gain to be had...

tigsly

It will impact on your deposit as you will have less debt.