Remortgage with a car loan

[Mummsnett]

Hi all, I'll be remortgaging in a year and am wondering what impact a personal loan will have on my ability to get a new mortgage deal? It'll be just over £9k by then. No missed payments since I got it in Feb. I'm aiming to have cc paid off by then (currently 2k) and will be paying £650pm childcare costs. I'm a single mum so after bills don't have much leftover, and am wondering whether my lack of extra funds plus loan plus childcare will count against me? My credit rating is excellent. Ltv will be 60%.

Yes it'll affect your affordability but we can't say whether it'll prevent the remortgage, it depends on your ingoings and other outgoings (it's more about the payment amounts rather than the amount of debt due over all) There are loads of mortgage affordability calculators online. One option is it take the mortgage out over a longer period, that makes lenders more comfortable as you have a lower more affordable payment, but you can then overpay to effectively create the term you were hoping for.

Just be aware that there is talk of interest rate rises in the next few months and this could have an effect on your budget. This along with utility prices is going to make monthly budgets more expensive.

Can you remortgage sooner? That way you maybe able to get a fixed rate before the rises

Will you be looking at a new fix with your current lender? If so, your loan, cc etc wont matter (as long as not talking crazy amounts). We have just renewed with our current lender at 66% LTV and have personal loan, car finance and 2 cc’s. Broker just asked for balances, terms and payment amounts along with our income details, then arranged the new deal at a pretty favourable rate I think (1.09%). Our lender states on their website that as an existing customer, to arrange a new fix, affordability and credit checks are not undertaken. Maybe your lender is the same. Anyhow, we’ve had no issue whatsoever, no questions asked or statements/payslips requested. Just make sure your truthful about the figures. Good luck.

Different scenario completely if you want to change lenders though as a completely new full application will be needed. This is one of the reasons we just renewed as I found the be bothered with doing all the paperwork gathering required for a new application and the difference in rate wasn’t much, 0.1 - 0.2 max in our case. Of course it’s best to have your finances in as good a shape as possible though.