Getting a mortgage

[Rosebud1302]

DP and I would like to look into moving in the relatively near future - once my son starts school in September so nursery fees are no longer an issue.

I have a car on finance which is paid monthly and will be for the next few years so that won't be going away unfortunately. Do mortgage lenders look really badly on this? I remember when we got our mortgage 6 years ago or so, they looked on it really unfavourably. We are on much higher wages now but I'm really worried we will get turned down for having the car payments on there.

Also, do they look down on people with credit cards? Im not at all knowledgeable when it comes to this sort of thing to be honest. We of course know we can afford to upsize slightly or we wouldn't be doing it. But I know it doesn't work like that in a bank's eyes!

Any advice would be much appreciated. Thank you :)

It went against me that i had paid everything in full and never had credit.

They will look favourably on it as it shows you can be reliable with repaying debts, or it was years ago when i bought my house.

Car finance and credit cards aren't a problem as long as you haven't missed any payments and have a good credit file. Cards and finance can be good for your file to show that you can keep up to the payments etc. They'll probably look at whether you can afford to make the mortgage payments on top of your existing financial commitments too.

Right ok so if more comes down to whether those commitments would affect a higher mortgage payment rather than the actual car being a problem in itself?

I recently got a mortgage. It really doesn’t matter what your outgoings are for (gym subs, Netflix, eating out, car stuff), it’s whether you can afford them. If the financial assessment shows you can, you’re all good.

I’ve just managed to do it on one salary (a specialist lender for my profession) but a two salary income should still get you a decent high street mortgage if you’ve got a decent deposit.

Good luck!

I would say so

It's calculated into your affordability. So how much you have coming in vs how much you have going out m

It's a broad rule of thumb, but generally, the value of any debt/ outstanding finance will be knocked off the total they will lend. As long as you're looking to borrow within that margin you should be good- no childcare costs will be a bonus.

It will help if you aren't utilising the majority of credit available to you as well, so cards not maxed out etc

Ok thanks everyone. If it really is a case of outgoings vs income then we should be fine. We have never defaulted on our payments and my credit card never gets anywhere near maxed out, and is almost (not always 100% but very nearly) paid off each month. So hopefully that makes us look good!

The other thing I forgot about is we both have a student loan. Mine is basically not even worth talking about as I don't earn enough to pay back anything meaningful. My partner does pay his back but it's so small. But again I just worry things like that look "bad" on paper. But if it's more just focused on income vs outgoings we should be fine?!

Student loans aren't taken into consideration

Not in England anyway, assuming that's where you're based ☺️

Student loan repayments are taken into consideration. They are a commitment that reduces your income.

We are in England yes. I do sort of remember it being asked about last time we got a mortgage but wasn't sure if things had changed.

Ok I have another question - am I right in thinking the affordability checks have changed recently? Do they still make people do all the intense budget planner type stuff? What actually has changed?

We've just been approved for our first mortgage. They asked for 3m bank statements but nothing more detailed than that. We have car finance and cc debt (at 0%), and student loans, and it hasn't been an issue at all, but was taken into account for borrowing capability/affordability.

@youlittlecharmer thank you that's good to know!