Does car finance affect the size of mortgage you can get?

[AngelinaJoelle]

I am thinking of taking out £6k of car finance over two or three years, potential commitment of about £180-270 per month.

To what extent would this affect how much a lender is willing to give me for a mortgage please?

If you get any type of loan for anything that repayment is taken off nett income per annum so reduces your multiples. Do mortgage first then sort out car loan.

To poster who asked about student loan. Yes they take that I to account as well. Basically any debt you have from anywhere is taken into account. That is why it is so important to keep s good credit history.

Don’t leave yourself without any savings to pay for things like car repairs. Always have at least£1k and ideally £3k available. This is after buying a car ir house. Things always go wrong and you need to budget to cover them.

An older car isn’t a problem. People seem terrified of not buying a new car (which. Means expensive mi they payments and far more spent over time) because of the worry of car maintenance and repairs. You need to ensure you have some cash for repairs and maintenance but recognise that over time, this is cheaper. Especially at the point you’re about to get a mortgage, not having. Car finance would be good.

Houses also require maintenance and some spending. So if you’re going to buy a house, expect to face some yearly costs. It’s just life. Again, deciding you. Must buy a new house to avoid this is a bit daft. Brand new houses have a premium on the price and over time you are paying mire, especially if you use a Help to Buy type scheme. if you come to sell within 5 years, chances are the price won’t have recovered to what you paid, plus staircasimg or moving out of Helo to Buy schemes all cost money.

Best way for cars and houses is to acknowledge you have to save some cash. Sometimes you have to wait a bit longer. Save some cash and always keep a couple of £k in reserve. It allows you to go for better deals and not choose 5e expensive options which tell you ‘no maintenance costs involved’ - remember these things aren’t free - you DO pay for maintenance and you pay MORE by going for a scheme which covers it for you via the product being brand new or the maintenance being included. In reality most people can’t afford brand new. They need to go for something second hand. That’s fine. The idea that only paupers buy second hand cars, or somehow you’re failing if you buy a 4 year old car is just daft. Money savvy people buy outright and often buy second hand in terms of all kinds of things.

They take the monthly payment X it by 12 and knock it of the the amount you can borrow .

My son just paid off a 10k loan as he’s buying a property shortly
the broker from L & C also advised him to shut down any credit card accounts that he doesn’t use as this can also possibly affect the amount you can borrow as lenders look at the amount of credit you have access to
Some take this into account and others don’t

my son did notice that his credit score went up a few weeks later when he did this

This is exactly how it worked for my DD!
You have to declare all debts - including car finance whether it’s a loan, PCP or lease. She paid off the loan before applying, bought an old banger, got the mortgage then once she moved house bought another car.

We have 15k car on finance,they deducted 15k off of the amount we could lend.