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If we have debt greater than our deposit, will we still be able to get a mortgage?

Posted on 23 April 2013 by Savva


We have £18000 deposit for a £180000 property however we have £22000 loans to pay off, will we get refused a mortgage because our deposit is less than the outstanding loan amount?

Saava,

It's not an ideal situation, but not a deal breaker either. Obviously if the debt is to stay when you have the mortgage, then the amount you pay per month will be factored into the lenders affordability calculations and this may affect the amount of money they will lend you.  Also if there are any late payments on the credit then that too could affect the amount the lender will be prapared to lend.

At the higher Loan to Value's the credit scoring for the major high street lenders is mucher stricter and therefore more difficult to get through. It may be that we'd need to look at a lender who manually underwrites and can therefore look at each case on its merits.

If you'd like to have a discussion regarding your options, then please let  me know and I'll arrange for one of our consultants to contact you.

Regards,

Simon

simon.collins@johncharcol.co.uk

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