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Getting Mortgage Approval with a Small Loan

  • 07-08-2020 1:53pm
    #1
    AlohaLights
    Closed Accounts Posts: 58 ✭✭


    Hi all,

    1st time poster. Apologies I am new to this world and just wanted some advice.

    I'm hoping to attain a mortgage of about 150k in the next year. Does anyone know if banks will consider giving you approval if you have your deposit ready to go but still are paying back a small loan (4k) or will they always tell you to go and pay off that debt fully before they'll consider your application?

    Thanks.


Comments

  • #2
    Woshy
    Registered Users, Registered Users 2 Posts: 1,429 ✭✭✭Woshy


    In my experience they will deduct the monthly loan payment from what your max monthly mortgage payment will be. So if the max you could borrow has you paying 1500 a month but you're paying 250 on a loan they will reduce what you can borrow so that your payments will be 1250 a month.

    That was a few years ago though so banks may say different now. For 4k I would just get it paid off before applying. It's not a massive amount but it could hold you back.


  • #3
    AlohaLights
    Closed Accounts Posts: 58 ✭✭AlohaLights


    Woshy wrote: »
    In my experience they will deduct the monthly loan payment from what your max monthly mortgage payment will be. So if the max you could borrow has you paying 1500 a month but you're paying 250 on a loan they will reduce what you can borrow so that your payments will be 1250 a month.

    That was a few years ago though so banks may say different now. For 4k I would just get it paid off before applying. It's not a massive amount but it could hold you back.

    Thank you kindly. Yes I would like to have it paid back. It's just I would love to have my mortgage approved by the time my lease ends so I don't have to waste an additional 1.5k a month on rent. But when I calculated my repayments I still would have about 4k left on my loan at this stage so would take a good few extra months to pay back when paying high rent and saving a good chunk of money for my deposit. The joys!


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