What amount can we borrow??

consnmattsmom

We are considering moving at the moment but are not sure of the amount we can borrow.

We have an existing mortgage of £94000 and our house should sell for £110000-£115000.

My husband earns £25000 per year and I earn £9000 part time. He also brings home an extra £200 per month for regular overtime.

We will be putting down minimum dep of 5% looking at a house of approx £140000 and paying off some of our debts with the rest.

We will still be left with some debt as follows:-
Car loan 234.83 - 2 yrs to go
credit cards -balance 8000.00 - monthly payments £200.

On paper it looks like we can afford it. What do you think we can borrow?

Kez100

You say you have debt in addition to the car and credit cards of 8,000. Is it possible that you are not actually affording your present lifestyle? In that case taking on a higher mortgage would seem silly.

consnmattsmom

We will have no other debt than the car and cards. We will have no additional monthly expenses if we moved as we are already paying those off as well as the debts we are clearing amount to more than the additional mortgage payment.

beecher

You should maybe get your house valued to get an idea of what you're likely to get in today's market.

Are you in the position now where you're paying your debts off and not adding to them, or are you still using your credit cards to pay any bills?

Kez100

I know you will have no debt but my question is - why are you in debt in the first place? Have you been living beyond your income and therefore borrowing? The reason I say this is because, if the debt is due to day to day living then wiping it out will solve one problem (i/e getting rid of that debt balance) but it will only start again in the new home.

If the debts were not incurred due to supporting your lifestyle it may be a different story.

consnmattsmom

We are in debt due to us being reckless in our younger days, mainly as we were having cars and changing them before we had paid for them so debt just grew. We are no longer adding to the cards and can afford every day life easily. Every spare penny we get now goes towards our cards.

Kez100

OK. Are you asking what you can borrow or whether you raise 95% of 140k?

consnmattsmom

Yes I am asking whether we would be able to get £131000 that we need for our mortgage. Or if not what the maximum would be that we could get.

Conrad

No one here can tell you how much you can borrow as this is determined by complex credit scoring mechanisms. You will simply have to apply to find out.