Debt reconsolidation done before application

atlasmm

Hi,

Myself and my partner both had a personal loan each in our names, however a couple months ago decided to take out another loan each for debt consolidation, using these funds to pay off the previous loans in full. 

This was done to spread the debt over a longer period in order to reduce our monthly payments and increase our affordability ahead of a mortgage application. 

We both have a Lifetime ISA with savings we have paid into each payday however I am worried that lenders will look at my credit file and think we used the personal loans taken out recently to fund our deposit. 

Will a lender likely see this and automatically reject, or will proof of settlement letter of the previous loans suffice?

Thanks

 

[Deleted User]

Lenders don't like to see any of these scenarios, you'll just have to wait and see the impact of your actions when sitting down with the mortgage advisers.
No-one here can predict this because each persons circumstances are completely different.