the big yim

i was just wondering, when they calculate your mortgage how do loans effect the final ammount?
do they take your total loan ammount which in my case would be 20k ish or do they work out how much you are paying towards your loan a year and take that off your salary?
thanks in advance for any help

Pedro_79

I'm pretty sure they normally just take your monthly payments into consideration. (at least they did with me)

But I also think a lot of lenders wouldn't like you having such a large debt aside from your mortgage.
Maybe you could consolidate it into the mortgage amount?

Langy

I'm not 100% how they calculate it but it doesn't take the total figure off the allowed amount as far as i know (Halifax anyway)

I had a 15k loan when i took my mortgage out and it only took 2.5k off the total figure i was allowed although this will probably vary from bank to bank

Whether or not you could put the loan in with the mortgage would depend on house valuation/price ratio as it would probably mean taking out a 100/110% mortgage which most banks don't really like...have you looked at a virgin one account as i believe they do something like this and all loans/credit cards/mortgage get put together at a fairly reasonable interest rate and allow you to make flexible payments. If you work out how much you'll be paying for the mortgage and how much you currently pay for the loan it could work out better for you

Rumplestiltskin!

More & more lenders nowdays make a decision on a mortgage application on affordability rather than 3,4,5 times salary.
So they will look at regular monthly income & regular outgoings then decide, so your payments against your loan would count "against" you in that respect.
Going through this process recently I have learned that with a decent IFA & a large deposit, anything is possible. For example I am in a lucky position to have a £250k deposit, and there are lenders out there that would give me a £500k mortgage with no proof of income - no payslips or P60's ! Crazy !
Apparantly 25% is the magic number, any deposit over that figure & they don't even check or want proof of your income.
I would get a good IFA who can "present" the numbers to lenders in the right way & secure the mortgage, if you are in the Surrey area I can put you in touch with mine who has worked miracles in the past !

R