Special condition on a mortgage to pay off our debt

JustMe18

Hi, who had an offer with these special condition ?  We are paying off ALL our debt with the sale of our current house and getting a new mortgage, as it affects affordability, our current mortgage offer stands this special condition in there. Basically It says I need to pay off all my debts 30 days after completion and provide proof. I am gonna do this for sure, saves me interest, want to get rid of all our debts etc. But it also says I can't take any other loans in order to pay this off. I'm not really planning to, as my sale is enough to cover those, but I will maybe take  some furniture on finance in future . It's just the whole thing doesn't have much logic in it, as if someone moves , then doesn't pay these of, what happens  ? 

DullGreyGuy

Mortgage gets called in


As you say, it doesn't preclude you from future lending, just stops you gaming the offer by taking a consolidation loan to technically repay the existing debts and just replacing it with a different debt. 

housebuyer143

Best pay it off and then send proof, at which point you can take furniture on credit. 

dunstonh

 who had an offer with these special condition ?  

Its not uncommon.

ut it also says I can't take any other loans in order to pay this off. 

That is logical.  Passing debt from one hand to the other hand isn't paying it off.

t's just the whole thing doesn't have much logic in it, as if someone moves , then doesn't pay these of, what happens  ? 

It would be a breach of contract, and they can terminate the mortgage and repossess it.

saajan_12

Perfectly logical.. comments in line

JustMe18 said:

Hi, who had an offer with these special condition ?  We are paying off ALL our debt with the sale of our current house and getting a new mortgage, as it affects affordability, our current mortgage offer stands this special condition in there.

Basically It says I need to pay off all my debts 30 days after completion and provide proof. I am gonna do this for sure, saves me interest, want to get rid of all our debts etc. - great so in their assessment, they are comfortable you can cover the repayments on £X where that's the new mortgage amount. They don't think you can cover £X + more debt repayments.  
But it also says I can't take any other loans in order to pay this off.- of course, because then your total debt repayment would be higher than £X and you're not really paying anything off. 
I'm not really planning to, as my sale is enough to cover those, but I will maybe take  some furniture on finance in future .- as long as that future loan in in line with whatever restrictions you have in your new mortgage and after they're satisfied your current loans are paid off, then thats fine. At that future point, the new finance company would assess your affordability and besides it would likely be a lower seniority. 
It's just the whole thing doesn't have much logic in it, as if someone moves , then doesn't pay these of, what happens  ? - Same as any other conditions they place eg that you can't let it out, you must pay monthly etc. If you move in and then breach the T&Cs, and if they find out, and if the choose to enforce, then they can recall the mortgage in full. You wouldn't be able to pay that, so they'd force the sale of the house, evict you and recover the money. 

JustMe18

saajan_12 said:

Perfectly logical.. comments in line

JustMe18 said:

Hi, who had an offer with these special condition ?  We are paying off ALL our debt with the sale of our current house and getting a new mortgage, as it affects affordability, our current mortgage offer stands this special condition in there.

Basically It says I need to pay off all my debts 30 days after completion and provide proof. I am gonna do this for sure, saves me interest, want to get rid of all our debts etc. - great so in their assessment, they are comfortable you can cover the repayments on £X where that's the new mortgage amount. They don't think you can cover £X + more debt repayments.  
But it also says I can't take any other loans in order to pay this off.- of course, because then your total debt repayment would be higher than £X and you're not really paying anything off. 
I'm not really planning to, as my sale is enough to cover those, but I will maybe take  some furniture on finance in future .- as long as that future loan in in line with whatever restrictions you have in your new mortgage and after they're satisfied your current loans are paid off, then thats fine. At that future point, the new finance company would assess your affordability and besides it would likely be a lower seniority. 
It's just the whole thing doesn't have much logic in it, as if someone moves , then doesn't pay these of, what happens  ? - Same as any other conditions they place eg that you can't let it out, you must pay monthly etc. If you move in and then breach the T&Cs, and if they find out, and if the choose to enforce, then they can recall the mortgage in full. You wouldn't be able to pay that, so they'd force the sale of the house, evict you and recover the money. 

Thanks for your time answering these. 
Yes I understand it's a breach, I didn't have intentions to break the contract. Debts are around £20k, so will pay them off from my house sale and will probably just need to take couple of grand to buy some furniture in future.