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  • FIRST POST
    • lolcaz
    • By lolcaz 15th Sep 18, 4:34 PM
    • 28Posts
    • 5Thanks
    lolcaz
    Would a mortgage broker be able to exclude a 0% loan from my affordability?
    • #1
    • 15th Sep 18, 4:34 PM
    Would a mortgage broker be able to exclude a 0% loan from my affordability? 15th Sep 18 at 4:34 PM
    I have 7 payments of 350 left on a 0% loan, for which I have the cash in my accounts to pay if necessary. Obviously being 0%, there's no reason for me to want to pay it off early, except for the fact that it severely impacts my mortgage affordability. I was playing around with a calculator and the affordability drops down about 20-25k if I keep the loan, which is understandable, but it'd be paid off mere months into the mortgage term anyway.
    Given that I'll have fewer than 6 months of payments and cash on hand to pay it, would a mortgage broker be able to disregard it for the affordability checks?
    I am seeing some flats and a mortgage advisor next weekend, so I can ask them anyway, but I wanted to see if it's even a possibility. If it's not, I'll just pay it off before the mortgage but would prefer not to!
    Psst... Nationwide referrals available.
Page 1
    • minimike2
    • By minimike2 15th Sep 18, 4:51 PM
    • 2,034 Posts
    • 1,535 Thanks
    minimike2
    • #2
    • 15th Sep 18, 4:51 PM
    • #2
    • 15th Sep 18, 4:51 PM
    At 7 months with that balance, very unlikely that it would be excluded with any lenders which automate this part of the decision. Maybe with a lender that manually assesses, but then you tend to pay higher rates.

    Just pay it off IMO. Looking at the big picture, there is virtually no point in not paying it off as any interest you would get on that money in savings in that time is hardly anything.
    • ACG
    • By ACG 15th Sep 18, 5:00 PM
    • 17,820 Posts
    • 9,605 Thanks
    ACG
    • #3
    • 15th Sep 18, 5:00 PM
    • #3
    • 15th Sep 18, 5:00 PM
    With 7 months unlikely, at 6 months probably yes.
    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.
    • lolcaz
    • By lolcaz 15th Sep 18, 5:16 PM
    • 28 Posts
    • 5 Thanks
    lolcaz
    • #4
    • 15th Sep 18, 5:16 PM
    • #4
    • 15th Sep 18, 5:16 PM
    Thanks. I will have 6 months left by the 1st of October, and likely fewer by the time it'll happen, so that's good to know. I will see what the mortgage advisor has to say next weekend! Obviously I would pay it off beforehand if it has a significant impact, but just wanted to find out if it's an option not to pay it off.
    Psst... Nationwide referrals available.
    • kingstreet
    • By kingstreet 15th Sep 18, 6:39 PM
    • 34,345 Posts
    • 18,655 Thanks
    kingstreet
    • #5
    • 15th Sep 18, 6:39 PM
    • #5
    • 15th Sep 18, 6:39 PM
    Your commitment will be to repay it on or before completion, so that might be less than three months before it expires anyway.
    I am a mortgage broker. 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. Please do not send PMs asking for one-to-one-advice, or representation.
    • Lotak
    • By Lotak 17th Sep 18, 9:23 AM
    • 80 Posts
    • 56 Thanks
    Lotak
    • #6
    • 17th Sep 18, 9:23 AM
    • #6
    • 17th Sep 18, 9:23 AM
    I have 7 payments of 350 left on a 0% loan, for which I have the cash in my accounts to pay if necessary. Obviously being 0%, there's no reason for me to want to pay it off early, except for the fact that it severely impacts my mortgage affordability. I was playing around with a calculator and the affordability drops down about 20-25k if I keep the loan, which is understandable, but it'd be paid off mere months into the mortgage term anyway.
    Given that I'll have fewer than 6 months of payments and cash on hand to pay it, would a mortgage broker be able to disregard it for the affordability checks?
    I am seeing some flats and a mortgage advisor next weekend, so I can ask them anyway, but I wanted to see if it's even a possibility. If it's not, I'll just pay it off before the mortgage but would prefer not to!
    Originally posted by lolcaz
    You might be alright.
    If it is critical for affordability that they have to include it and that it means you fail the stress test, then ask them to redeem it (i.e. borrow an additional [say] 2,100) and pay off the balance as part of the mortgage (i.e. overpay by the amount you currently pay).
    Obviously you'll be paying a small amount of interest on it, but it's a lot better than not being able to get a mortgage!
    Current Debt (excluding mortgage) - 13.8k
    Reducing 600 / month.
    • MortgageAdviserTorquay
    • By MortgageAdviserTorquay 18th Sep 18, 10:30 PM
    • 6 Posts
    • 3 Thanks
    MortgageAdviserTorquay
    • #7
    • 18th Sep 18, 10:30 PM
    • #7
    • 18th Sep 18, 10:30 PM
    Some lenders will ignore the payment if 4-6 months are left to be paid which helps with affordability
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