Mortgage and loans?

S

sharonp

Registered User
Messages
37
Hi,

I will be appying for a mortgage in Feb or Mar 08 with my other half. I have a car loan of approx €13,500. I've never missed or even been late with a repayment.

Will the size of this loan affect the amount of a mortgage i can get?

Thanks!
 
The amount of the monthly repayment will impact on your repayment capacity. Repayment capacity for a mtg is generally calculated on Net Monthly income less other borrowing commitments.
So it will inevitably impact on how much you can borrow.
 
Your best bet is to try to clear the loan amount as quickly as possible. At a rough quess I would estimate that you are paying approx €270-€280 per month for the €13500 if it was borrowed over 5 years? That €270 repayment could reduce the mortgage approval amount by up to €60,000.

You could also refinance it with the credit union, and it probably wouldn't show up on your credit bureau.
 
Its not the size of the loan that matters it is the monthly repayment.

If the car loan is €250pm - that means you have €250pm less to contribute to your mortgage and therefore your borrowing potential is reduced.

If you are looking to stretch your borrowing potential - then any other outgoings will mean you have less money left over at the end of the month to pay towards your mortgage
 
All regular monthly outgoings will affect your borrowing including loans, maintenance, credit card balance etc. To maximise your mortgage eligibility try to reduce all regular outgoings as much as possibe.
 
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