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Can You Get A Mortgage If You’re In Debt?

MORTGAGES | 08.06.2018

If you’d like to buy your own home or remortgage an existing property, you may be wondering if it’s possible to do so if you’re in debt. It’s a common concern amongst home buyers – and for good reason. With lenders tightening their criteria in recent years in a bid to ensure they only lend to those who can afford to do so, many people have found their applications rejected due to reasons ranging from a low salary to a high level of debt.

Thankfully, debt doesn’t automatically spell a rejected application. Whether or not your application will be accepted will depend on your own individual circumstances. Let’s take a look at this in more detail.

Some types of debt can be considered ‘good’

Not all types of debt are frowned upon by lenders. For example, if you have student debt, this is unlikely to have a significant impact on the success of your application, providing your finances are otherwise secure and you can prove your ability to afford the mortgage. After all, student debt has become such a normal part of life that it would be foolish for lenders to reject those who’ve taken out student loans. It would also rule out millions of prospective borrowers, many of whom will have healthy graduate salaries.

Lenders will assess how manageable the debt is

Lenders will want to know how manageable your existing debts are. If you’re in control of your debts, you’re comfortably paying them off each month and you have enough money to cover living expenses on top of this, home ownership might not be completely out of your reach. However, if you’re struggling to manage essential living costs and repay the money you owe, you may find it hard to convince a lender to give you the loan you need.  

A strong deposit will help you considerably

A large deposit will make lenders more likely to overlook debts that you have, providing you’re keeping on top of the repayments. Some people consider taking out a loan so that they can put down a larger deposit, but this could have disastrous consequences, seeing you rejected completely. Although some lenders are willing to overlook debt that is being sensibly managed, applying for a loan shortly before applying for a mortgage can see you rejected.  

Your credit record will be checked

No matter which lender you apply for your mortgage with, your credit score will be checked so that your attitude to debt can be assessed. After all, your lender will want to ensure you’re a sensible borrower with a track record for repaying the money that you owe. If you have a history of late payments, missed payments and defaults, this is likely to impact your application negatively. To improve your chances of having your mortgage application approved, get in touch with the team at TaylorMade. We know each lender like the back of our hand and we’ll be able to take a close look at your financial situation before pointing you in the direction of the lenders most likely to say ‘yes’ to the home loan you need.
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TaylorMade Finance Ltd is authorised and regulated by the Financial Conduct Authority.

Complaints:

In the event that you wish to complain, you can contact us by email, telephone or letter.

Our address for this is:
Complaints Officer, TaylorMade Finance Ltd, 4 Church Road, Urmston, Manchester, M41 9BU. Our email address is info@taylormade-finance.co.uk and our telephone number is 0161 776 1089. We will then investigate the issues raised and inform you of our findings. Should you be unhappy with the resolution to your complaint you may contact the Financial Ombudsman Service, who can be contacted at the following address: Financial Ombudsman Service, Exchange Tower, London, E14 9SR.

Email: complaint.info@financial-ombudsman.org.uk
Phone: 0800 0234 567

Your mortgage will be secured against your property.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Our fee for this service is 1.95% of the mortgage balance (minimum £1,295 to a maximum of £2,995 although reduced to maximum £1,995 without debt consolidation). Typically this will be £1,995.