Mortgage and Car Finance

TheMistyFox

Hi there,

I’m going through a remortgage and I’m a bit confused and looking for a bit of help please. I have car finance but the mortgage provider wants me to clear the car finance in full as a condition of the remortgage. There are debts being taken into the remortgage but not this one. 

Is this usual? I’ve not come across this before, but I do need a car so unfortunately I’ll probably have to do finance or a loan (definitely at a lower value due to costs etc) once the current finance is settled and the remortgage fully complete.
 

Thanks for any advice/help! I’d never realised car finance had such an impact with mortgages

simon_or

It looks like the monthly car loan payment makes the loan size unaffordable and it's affordable without that payment, hence the requirement to clear that. Quite normal if that is the case.

If you've already got the full mortgage offer and it includes a condition that you must pay off the car loan, then that means your broker or you have said in the application that it will be paid off and the bank has ignored that commitment when calculating affordability.

greenwood132

Affordability checks are also done for car finance now so the new mortgage will also impact any car finance application in the future