Refinanced debt repayments included in mortgage application

S3323Ned

Hi
just wondering if it is normal to included repayments for debt you will be paying off in part of a remortgage application.
We are looking to move home, we have a fair amount of equity in our home so are able to put down a 30% deposit on our new property. This still leaves us money from the equity to cover our legal and estate agent fees and stamp duty as well as take a small lump sum. We were going to use this lump sum to pay off a loan we have. When we are going through our mortgage application the mortgage company still wants to include the monthly payment for the loan as an expense. Is this normal? We are currently failing the affordability with this loan payment included. (It’s a large payment each month hence why we want to pay off the loan).

They have said that as they can’t guarantee we will pay off the loan at completion it needs to be included, so I have offered to pay the loan off out of savings now and repay my savings at completion. The bank said the application might still be declined as we won’t have as much savings available as of now and I’m currently on maternity leave so this savings covers my wage. I feel like I'm stuck between a rock and a hard place and frustratingly with the loan repaid our mortgage payment will be less than we are currently paying out. 

kingstreet

This is lender dependent. Some deduct commitments from affordability even if they will be repaid.