38 Y O First Time Buyer

LemonadeBudget

Partner and I have combined annual income of around 75k before tax, myself 27.5k he 47.5k. Our LISAs have 42k combined that we're planning to use on our first home purchase

In our chosen areas we're looking at a 200-230k sort of price bracket for 2.5 (3 if lucky) bed

My question: when we make our mortgage application in 2 to 3 months time - will my 2.5k debt (CC and PayPal Credit) ruin our chances?

(Have never missed a payment - have just been focusing on making sure I have a 'Moving costs / Solicitor Fees' pot of around 2k)

Not expecting in depth financial advice on an Easter Weekend for free!  But a thank you to anyone who reads or replies, it's appreciated 

Thanks @smipsy for suggesting a post in here

Brie

The bank will look at both of your credit histories and decide how much money you can afford to borrow.  This will include all the credit you both currently are using and have available.  

So if you have £2.5k debt but also another £7.5k available credit it's this £10k that they will look at.  Add to that your monthly paid credit agreements for overdraft, car insurance and mobile phone contracts.  Same again for boyfriend.  Obviously they might notice you're not clearing your debts each month and might ask why not.  They need to be clear that you can afford your normal monthly bills plus keep up with all your creditors payments, not just paying debts.

SiliconChip

LemonadeBudget said:

Thanks @smipsy for suggesting a post in here

I feel slighted, it was me that suggested posting on here!

ACG

It shoul be fine.
Although if your are right up to the limits, it might not look great. But your income is more than enough for what you are looking to do. 

LemonadeBudget

SiliconChip said:

LemonadeBudget said:

Thanks @smipsy for suggesting a post in here

I feel slighted, it was me that suggested posting on here!

Oh crumbs!  Can you tell I'm in 'holiday' mode having had a long weekend?! Thanks @SiliconChip

annetheman

If it is reassuring, I am applying alone and have £41k debt if you include student loan, about £20k without (CCs and loan), tiny mortgage of 5% and borrowing £346k. I got 2 mortgage offers, 1 I received in January in 3 days from application - applied on Saturday, offer on Wednesday morning (!) and then I had to pull out of that house... The current I got in less than 2 weeks.

So, definitely you will be fine!!

Consider joining us over on the debt-free board, as you will find loads of inspiration there to pay off your relatively small debt - you can possibly do it before you draw down a mortgage, since you haven't yet applied! It's a really helpful board and loads of tips and methods to help you there. Good luck!