First time buyers mortgage advice

[uptheantrimcoast]

Hello, I'm going someone on here can help me!

My partner and I are first time buyers and currently going through the process of applying for an AIP. Partner has a personal loan of around £20k and their monthly payments are significantly affecting how much we can borrow.

There's no way to change the amount they pay each month with this loan as it's fixed, but they can pay it off in full whenever they can. Would it be a good idea to take out another loan with better payment terms to pay this one off? Thinking being that with a smaller monthly payment we'll be offered a larger mortgage. Or would that have a significant impact on our mortgage application? We both have "excellent" credit scores ATM, no other debt (excepting student loans).

We aren't looking to max ourselves out, but we're very limited on what we'd be able to buy currently so thinking of options.

Thanks

*hoping someone can help us

Glad I checked for typos 😅

It could help but you'd need to wait a while after taking out a new loan to make your mortgage application- probably at least around 6 months- as it would class on your application as a new application for credit made at that time.

The monthly payment isn't the only thing- they will take the amount owned off credit they will lend regardless- so I think you might be best just seeing what you can get with it as is at the moment.

If the loan was for something like a car would they be able to sell the car to pay off the loan and do without until after you've bought a house?

And/or can you buy with a lower deposit, using some of the deposit to pay off the loan?

What was the loan for? How are they generally with money? I'd be a bit concerned about committing to a mortgage with someone in so much debt as it sounds like their finances might be shaky.

It would make a lot more sense to ask if you can roll that debt into the mortgage and have a single larger monthly payment. If doing that would make the loan-to-value stop working then you are borrowing too much anyway. However if you do this and don't have completely merged finances and the debt is his rather than joint, there should be clear written agreement for how this would be applied to mean he owns a smaller share of the house.

It would make a lot more sense to ask if you can roll that debt into the mortgage and have a single larger monthly payment.

It’s never a good idea to turn unsecured debt into secured debt, which is what you’d be doing if you included it in your mortgage. I take it the issue is affordability rather than LTV, in which case taking a new loan with lower payments might help but I’d do my sums first, unless the loan has a very high monthly payment changing the product may not affect your borrowing capacity that much.

sorry but this is absolutely terrible advice.