Will a finance vehicle affect us getting a mortgage?

hannahsim22

Me and my partner are interested in buying a house in the next 12 months.
my partners van is on its way out and needs a new one.
The only real option is to get one on finance and after 5 years he will own it. 

We are hoping to buy something for around 170,000 to 190,000 with a 5% deposit but 10% if possible depending on how much we can save between then and now on top of what we already have. 

Will this affect us being accepted for a mortgage and how much is it expected to affect us if it does? 

Thanks you. 

Mutton_Geoff

That's an expensive van. You could buy a house for that kind of money 

The answer to your question, yes, it will affect the amount you can borrow with regards to affordability and existing debt. You'd need to speak to a broker closer to the time.

Ath_Wat

hannahsim22 said:

Me and my partner are interested in buying a house in the next 12 months.
my partners van is on its way out and needs a new one.
The only real option is to get one on finance and after 5 years he will own it. 

We are hoping to buy something for around 170,000 to 190,000 with a 5% deposit but 10% if possible depending on how much we can save between then and now on top of what we already have. 

Will this affect us being accepted for a mortgage and how much is it expected to affect us if it does? 

Thanks you. 

Is the 170K the budget for the house or the van?

DullGreyGuy

hannahsim22 said:

Will this affect us being accepted for a mortgage and how much is it expected to affect us if it does? 

It will be part of the consideration for affordability as the lender clearly has to decide if you can afford to pay both the van and the mortgage or not. If it will actually affect you or not will depend on if you can afford a £170k van and a house repayments or not

youth_leader

My son and his girlfriend are waiting to pay off her car debt before buying a house.  The less debt you have the better.  

hannahsim22

Ath_Wat said:

hannahsim22 said:

Me and my partner are interested in buying a house in the next 12 months.
my partners van is on its way out and needs a new one.
The only real option is to get one on finance and after 5 years he will own it. 

We are hoping to buy something for around 170,000 to 190,000 with a 5% deposit but 10% if possible depending on how much we can save between then and now on top of what we already have. 

Will this affect us being accepted for a mortgage and how much is it expected to affect us if it does? 

Thanks you. 

Is the 170K the budget for the house or the van?

No sorry! It’s for the house!!! The van would be around 10k paying £250 a month.

hannahsim22

DullGreyGuy said:

hannahsim22 said:

Will this affect us being accepted for a mortgage and how much is it expected to affect us if it does? 

It will be part of the consideration for affordability as the lender clearly has to decide if you can afford to pay both the van and the mortgage or not. If it will actually affect you or not will depend on if you can afford a £170k van and a house repayments or not

No sorry! The 170k would be for the house. The van would cost £250 a month.

chanz4

hannahsim22 said:

Ath_Wat said:

hannahsim22 said:

Me and my partner are interested in buying a house in the next 12 months.
my partners van is on its way out and needs a new one.
The only real option is to get one on finance and after 5 years he will own it. 

We are hoping to buy something for around 170,000 to 190,000 with a 5% deposit but 10% if possible depending on how much we can save between then and now on top of what we already have. 

Will this affect us being accepted for a mortgage and how much is it expected to affect us if it does? 

Thanks you. 

Is the 170K the budget for the house or the van?

No sorry! It’s for the house!!! The van would be around 10k paying £250 a month.

worth looking at a cheaper van buy it, than with that huge outgoing

RM_2013

I have car finance and we were accepted for our mortgage no problems but it depends on your affordability.  Ideally the less debt you have the better.  Good luck

GixerKate

its worth having a play with the affordability calculators that the various banks offer to see whats possible and whats not.  The amount of debt does impact what the banks will loan you - loads of debt and not a lot of money coming in itsn't good but also zero debt without a credit card can also count against you.

In itself a car loan won't stop the bank offering a mortgage but if there is other debt than this could be a tipping point.

If it were me, I would play around with the affordability calculators and run some numbers with and without the car loan.

Mutton_Geoff

hannahsim22 said:

No sorry! The 170k would be for the house. The van would cost £250 a month.

Assuming basic rate tax payer, £250 a month is £3750 a year of pre tax income. Banks typically lend 4x income so this loan could possibly trim £15k off your borrowing capability, more if you earn less and the £250 is a large proportion of your disposable income after living costs.