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  • FIRST POST
    • meow5678
    • By meow5678 11th May 18, 7:35 AM
    • 149Posts
    • 300Thanks
    meow5678
    FTB - clear loan or save the extra pennies before AIP/DIP
    • #1
    • 11th May 18, 7:35 AM
    FTB - clear loan or save the extra pennies before AIP/DIP 11th May 18 at 7:35 AM
    I think I know the answer to this but I'll put it to the learned group...

    I've saved my target for my contribution to the deposit.

    I have a personal loan (for a car) which I pay off monthly - 323/month, 5.5k remaining. Interest has already been paid up front and included in the installment amount. So I can't save anything paying it off early.

    Before we go to discuss an AIP/DIP with a broker/bank etc, should I use the money I was saving (approx 1300/month) to:
    • Pay off the loan in total (this would take me about 3 months)
    • Put the money aside for furniture/moving costs etc.
    I'm not sure whether it will work in my favour to remove this monthly DD (it is the only significant outgoing I have) and therefore increase my disposable income.
    Or
    Continue paying off the loan for another 17 months as planned and demonstrate that I can pay back and stick to the loan terms (I read that paying loans off early does not have a positive effect on credit history/score etc).

    Hope that makes sense!
    Thanks
    FTB
    Saving for my first deposit
Page 1
    • ACG
    • By ACG 11th May 18, 8:02 AM
    • 17,811 Posts
    • 9,603 Thanks
    ACG
    • #2
    • 11th May 18, 8:02 AM
    • #2
    • 11th May 18, 8:02 AM
    It will depend on your income and the size of Mortgage you are after.

    If your income is 50k and you want a 100k Mortgage it wont be a problem keeping the loan. If your income is 25k and you want a 100k Mortgage it probably will.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • meow5678
    • By meow5678 11th May 18, 8:23 AM
    • 149 Posts
    • 300 Thanks
    meow5678
    • #3
    • 11th May 18, 8:23 AM
    • #3
    • 11th May 18, 8:23 AM
    Thanks ACG,

    my income is 45k, my BF's is around 30k (self employed for 2 years).

    We have a deposit of 80k (saved + gifted) and want to borrow around 300k (but probably less in reality).
    LTV approx 80%?

    Just getting into this, so it's all a bit hypothetical at present.

    Thanks
    FTB
    Saving for my first deposit
    • ACG
    • By ACG 11th May 18, 8:42 AM
    • 17,811 Posts
    • 9,603 Thanks
    ACG
    • #4
    • 11th May 18, 8:42 AM
    • #4
    • 11th May 18, 8:42 AM
    I think there are lenders who will potentially do it, but I think there are also lenders where it may fail affordability.

    I would personally say leave it where it is for the time being (assuming that is your preference) and then see what the broker/bank says on the affordability front when the time comes.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • GoingOn30
    • By GoingOn30 11th May 18, 8:52 AM
    • 106 Posts
    • 73 Thanks
    GoingOn30
    • #5
    • 11th May 18, 8:52 AM
    • #5
    • 11th May 18, 8:52 AM
    Great work saving such a robust deposit, but your affordability is pushing it if you want to borrow up to 300k.
    I would keep the money and save it for now, you can always pay off a chunk if the loan if at mortgage application a lender tells you they would prefer that.
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