I have a 15,000 7 year loan with two years to go. If I declare this when applying for a mortgage it may well reduce the maximum they will lend.
Can I omit it from my application and can they find out if I did.
Ken
They might (should) see it on a credit report. Omitting it might make them suspicious - although you could claim you were going to make an early repayment of the loan with some of the mortgage. With 2 years to go the actual amount owed is going to be a lot less than £15K isn't it?
If you fail to declare it then (1) you are committing fraud, and (2) they are sure to find out and will probably not lend you anything at all, on the basis of non-declaration (i.e. can they trust you?).
Different lenders approach the issue of existing loans in different ways. Anyway, you could maybe increase the amount of mortgage you apply for and pay the loan off with that. Provided the mortgage terms allow it you could overpay, thereby effectively repaying the loan in the same 2 years, and finding it easier as well because the mortgage interest rate is probably less than that on your loan.
Rob Graham
In message , Ken writes
Yes and yes - it will appear on your credit reference report, so it's not worth lying about it.
Its not the amount owing that restricts the amount a mortgagee will lend, but the monthly payments. Generally the annual payments on a loan are deducted form your salary before applying the income multiplier.
"john boyle" wrote
Which is a bit silly when you think about it. Especially if you have (say) X000 owing on a loan, and happen to have access to that amount of money, even for just a few days. You simply pay off the loan, take a mortgage loan for **much more** than the X000 over what the lender was previously prepared to lend (when you hadn't paid the loan), pay back the X000 to wherever you temporarily got it from (for those few days) and hey presto - you've suddenly got a bigger mortgage loan that the lender was previously prepared to give!!
In message , Tim writes
They mortgagees have, see below.
Thats why they generally exclude any loans which have less than 6 months or year to run or those which you intend to repay on or by completion of the mortgage.
It is really only of consequence when people are looking for the absolute maximum their earning will allow without LTV becoming a problem.
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