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Original poster

Mortgages

25 replies

Flamingogirl08 · 10/03/2023 15:09

Do you think it would be possible to get a mortgage when between us we have 4 loans (all taken out over a year ago when we were in financial difficulty). There are 2 years to go on them so worst comes to worst we wait the 2 years.

Credit scores are good and no missed or late payments etc.

In terms of affordability we would be looking to borrow around £150k less than what we would potentially be offered based on income alone and would have about 7% deposit.

Am I in dream land to think we would be offered a mortgage in around January time?

OP posts:
Lovelyveg82 · 10/03/2023 15:12

A 7% deposit?

unlikely these days, especially with the loans (how much)

SquashPenguin · 10/03/2023 15:14

It all depends how much you can afford each month after your debt repayments. It’s perfectly fine to have debt, as long as it’s affordable. I got my mortgage offer whilst I still had a credit card to pay off, but I was paying £1000pcm in rent each month whereas the mortgage was only £600. I ended up paying it off before I even moved. A mortgage advisor is your best call!

NoSquirrels · 10/03/2023 15:18

Your deposit would be an issue, and do you have enough to pay the fees and stamp duty?

Original poster
Flamingogirl08 · 10/03/2023 15:21

FTB so no stamp duty. Yes would have enough for fees, I've taken that into account. I've had an AIP agreed which included deposit amount and all outgoings including the loans.

Loans are about 13k in total.

Agree with PP, when the time comes I'll approach a broker and if they think no go then its just a case of keep going, paying off and saving more for a bigger deposit. We just dream about buying our own place all the time and would love it to happen sooner than later.

OP posts:
Lovelyveg82 · 10/03/2023 15:28

What’s your income?
what were the loans for (may be relevant)

but ultimately… 7% deposit? Very unlikely you’d be offered one or the ones you would be… crap rate

namejump · 10/03/2023 15:34

There are plenty of 95% LTV mortgages available I don't know why people are saying you'd struggle with that, just had a quick look and Nationwide is around 5% now for a 95% and it's only slightly less for their 90%

The loans will come down to affordability, if you can comfortably afford the repayments with the mortgage, it shouldn't be a problem (though different lenders will have different risk appetites) There are affordability calculators online if you wanted to try that before speaking to a broker.

Lovelyveg82 · 10/03/2023 15:42

Very easy to look at rates on line!

but whether or not Nation wide would accept a 7% discount with multiple loans (although no idea how relates to income)… is a very very matter

Lovelyveg82 · 10/03/2023 15:44

I am guessing that the deposit is very small? Otherwise why wouldn’t you pay off the loan with the savings you’ve made for the deposit?

Doesn’t seem sensible to have 4 loans and and saving. Just focus on clearing the loans and then get cracking on the savings

Original poster
Flamingogirl08 · 10/03/2023 15:46

So our joint income is £65k and looking to borrow around £150k

Loans were for a couple of things that all came at once. I had severe illness during pregnancy that stopped me working and severely lowered my income. Then baby and then landlord wanted to sell property so had to move and furnish somewhere as we were in a furnished property.

In a much better position now and are comfortably paying rent, loan payments and saving.

OP posts:
Original poster
Flamingogirl08 · 10/03/2023 15:50

Lovelyveg82 · 10/03/2023 15:44

I am guessing that the deposit is very small? Otherwise why wouldn’t you pay off the loan with the savings you’ve made for the deposit?

Doesn’t seem sensible to have 4 loans and and saving. Just focus on clearing the loans and then get cracking on the savings

Yes this is something we're discussing and looking at. Renting is just so unpredictable right now that if we were able to buy then that would be hugely preferable

OP posts:
namejump · 10/03/2023 15:51

@Lovelyveg82 loans are not in themselves "bad", it's affordability that matters (and an otherwise healthy credit score, which if they've kept up with payments is likely fine)

NoSquirrels · 10/03/2023 15:52

I think without figures it’s actually difficult to answer this question properly - 7% deposit could be small and loans could be high. But in general terms, I think 4x loans taken out 12 months ago combined with a fairly low deposit would be a significant hurdle to overcome. Best to really overpay the loans aggressively or up the savings. Houses are expensive and always need something doing so if there’s no spare cash now it does mean affordability might be an issue.

But if you had an AIP already that’s based on your exact scenario and it was positive, then why are you concerned, OP?

Lovelyveg82 · 10/03/2023 15:53

namejump · 10/03/2023 15:51

@Lovelyveg82 loans are not in themselves "bad", it's affordability that matters (and an otherwise healthy credit score, which if they've kept up with payments is likely fine)

Agreed.

however if the 4 loans total a very sizeable amount in relation to income, which i suspect they do (otherwise why not paid off just one by now?) then - yes, it will have a substantial impact.

Lovelyveg82 · 10/03/2023 15:54

how did you get your AIP? Online mortgage calculator or actually direct with bank and declaring all information / income etc and they came back with an AIP at an acceptable rate?

if the former, that is not an AIP
if the latter, why are you asking?

whistlingkettles · 10/03/2023 15:55

You'll be assessed on affordability. If your loan payments are really stretching you and there's not much disposable income afterwards then you might have a problem. But I got a mortgage several years ago at a good rate of 2.3% and I had £12k of debt. I had a 10% deposit though.

Lovelyveg82 · 10/03/2023 15:56

whistlingkettles · 10/03/2023 15:55

You'll be assessed on affordability. If your loan payments are really stretching you and there's not much disposable income afterwards then you might have a problem. But I got a mortgage several years ago at a good rate of 2.3% and I had £12k of debt. I had a 10% deposit though.

And in the context of your income…. What did that £12k debt represent?

Original poster
Flamingogirl08 · 10/03/2023 15:58

Lovelyveg82 · 10/03/2023 15:54

how did you get your AIP? Online mortgage calculator or actually direct with bank and declaring all information / income etc and they came back with an AIP at an acceptable rate?

if the former, that is not an AIP
if the latter, why are you asking?

I got the AIP with a bank on their website. So yes I declared all outgoings including the loan payments , however there was no option to state they were separate loans if you seen what I mean? I'm not sure if the fact that there are multiple will impact things.

Also I'm brand new to all this so not sure how reliable AIPs are. I was just looking for a bit of impartial advice really.

OP posts:
Lovelyveg82 · 10/03/2023 16:00

Do you have the link to the site and i chech whether actually an AIP?

Original poster
Flamingogirl08 · 10/03/2023 16:01

Lovelyveg82 · 10/03/2023 16:00

Do you have the link to the site and i chech whether actually an AIP?

It was Natwest and they emailed me saying congratulations here is your AIP

OP posts:
Lovelyveg82 · 10/03/2023 16:11

Flamingogirl08 · 10/03/2023 16:01

It was Natwest and they emailed me saying congratulations here is your AIP

Show quote history

Call branch and arrange to speak with a mortgage advisor.

bring your AIP

go from there. Then you will know whether better to focus on paying off your loans or saving in the short term

and you will get a feel for how increasing your deposit will benefit you

Original poster
Flamingogirl08 · 10/03/2023 16:25

Lovelyveg82 · 10/03/2023 16:11

Call branch and arrange to speak with a mortgage advisor.

bring your AIP

go from there. Then you will know whether better to focus on paying off your loans or saving in the short term

and you will get a feel for how increasing your deposit will benefit you

Show quote history

Yes, that's good advice. I will do that.

Thanks 😊

OP posts:
butIwantitnow · 10/03/2023 21:14

Sounds like it might work! I am not sure that the different number of loans would make a difference as long as you pass the affordability tests. I wanted to buy for ages that when the time came I couldn't quite believe it would happen - got the AIP thought I wouldn't get an actual offer, got the offer didn't believe they would actually send the funds to complete. Felt like a complete dream. Good luck

Lovelyveg82 · 11/03/2023 06:36

@butIwantitnow to be fair, you are on an absolutely enormous salary (currently deciding whether to take £100k pay cut!) so I doubt you had multiple loans and a 7% deposit!

butIwantitnow · 11/03/2023 07:22

At that time in my life I had some debt. But my point was more about how hard it can be to believe the thing you want most may happen and I am hoping the OP gets the good feeling of realising it actually will

Original poster
Flamingogirl08 · 11/03/2023 08:18

butIwantitnow · 11/03/2023 07:22

At that time in my life I had some debt. But my point was more about how hard it can be to believe the thing you want most may happen and I am hoping the OP gets the good feeling of realising it actually will

Thank you ❤️

We will get there even if it takes longer than we'd like. You're right sometimes it feels like it will just never happen but I'll make sure it does.

OP posts:
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