Car Purchase and Mortgage Application?
Discussion
Morning,
After a bit of advice, historically I have always used a personal loan (high street lender) to fund my car purchases. My most recent stream of buying came to an end on the 30th Dec and I have quite enjoyed being car free, although dragging myself out of bed at 5am in the morning to get on the bike and cycle to work hasn’t always been easy but done me the world of good.
Whilst I would love to continue as I am my workplace is moving beyond what I would deem a reasonable cycling distance and being a petrol head I can’t really be without a car for too long.
There may be a potential house move in the next 6 months, we are currently on the market and have our eye on something but these things have a habit of not always playing out how you would hope.
That being the case I want to purchase a new car and am considering a PCP for the first time (ability to put little down and have sensible repayments) on a 1 year old car with 5k miles on the clock.
If I take out a PCP how will that realistically affect my mortgage potential - will it just be a case of when my ins and outs are calculated they will simply take into account what my monthly payment is on the car or will they look at the total amount of the contract and take that off??
I need a car, not going to go crazy (£13k) I reckon, but want to do it with the least impact on a future mortgage application as I can.
I appreciate I could buy a shed for a while until I know what’s happening but this could be 5 weeks or it could be 6 months before the house thing happens plus they often are a false economy and won’t really provide the enjoyment I get from driving/owning something a little special.
Si
After a bit of advice, historically I have always used a personal loan (high street lender) to fund my car purchases. My most recent stream of buying came to an end on the 30th Dec and I have quite enjoyed being car free, although dragging myself out of bed at 5am in the morning to get on the bike and cycle to work hasn’t always been easy but done me the world of good.
Whilst I would love to continue as I am my workplace is moving beyond what I would deem a reasonable cycling distance and being a petrol head I can’t really be without a car for too long.
There may be a potential house move in the next 6 months, we are currently on the market and have our eye on something but these things have a habit of not always playing out how you would hope.
That being the case I want to purchase a new car and am considering a PCP for the first time (ability to put little down and have sensible repayments) on a 1 year old car with 5k miles on the clock.
If I take out a PCP how will that realistically affect my mortgage potential - will it just be a case of when my ins and outs are calculated they will simply take into account what my monthly payment is on the car or will they look at the total amount of the contract and take that off??
I need a car, not going to go crazy (£13k) I reckon, but want to do it with the least impact on a future mortgage application as I can.
I appreciate I could buy a shed for a while until I know what’s happening but this could be 5 weeks or it could be 6 months before the house thing happens plus they often are a false economy and won’t really provide the enjoyment I get from driving/owning something a little special.
Si
I'd go with the buy a £1-2k car outright so that when it comes to mortgage applications you have one less regular payment. Then once you have your mortgage go crazy with whatever pcp you like if that is what you want.
There are plenty of interesting cars that will last years let alone a few months, my go to el cheapo car at the moment is the Lexus is200/300 plenty for barely a grand
There are plenty of interesting cars that will last years let alone a few months, my go to el cheapo car at the moment is the Lexus is200/300 plenty for barely a grand
Sorry, I don’t know the answer (Sarnie’s ya man, I suspect!)
....but I many years ago, when I decided to buy my first house, I sold a perfectly good car to buy a shed.
I think I paid under a grand (old car was probably about 5K worth - this was around 1987!)
I had it about 18 months: a Peugeot 104, in bogey green colour
I actually grew to love that motor, for all it’s foibles. Managed to get 100 out of it (downhill, obviously on private roads officer!). Never let me down.
& clearly, some 30 years on, I still hold fond memories of that time.
In your shoes, I’d buy a shed for a year (or two). Sheds these days are probably a bit safer and more reliable too!
....but I many years ago, when I decided to buy my first house, I sold a perfectly good car to buy a shed.
I think I paid under a grand (old car was probably about 5K worth - this was around 1987!)
I had it about 18 months: a Peugeot 104, in bogey green colour
I actually grew to love that motor, for all it’s foibles. Managed to get 100 out of it (downhill, obviously on private roads officer!). Never let me down.
& clearly, some 30 years on, I still hold fond memories of that time.
In your shoes, I’d buy a shed for a year (or two). Sheds these days are probably a bit safer and more reliable too!
SiT said:
Morning,
After a bit of advice, historically I have always used a personal loan (high street lender) to fund my car purchases. My most recent stream of buying came to an end on the 30th Dec and I have quite enjoyed being car free, although dragging myself out of bed at 5am in the morning to get on the bike and cycle to work hasn’t always been easy but done me the world of good.
Whilst I would love to continue as I am my workplace is moving beyond what I would deem a reasonable cycling distance and being a petrol head I can’t really be without a car for too long.
There may be a potential house move in the next 6 months, we are currently on the market and have our eye on something but these things have a habit of not always playing out how you would hope.
That being the case I want to purchase a new car and am considering a PCP for the first time (ability to put little down and have sensible repayments) on a 1 year old car with 5k miles on the clock.
If I take out a PCP how will that realistically affect my mortgage potential - will it just be a case of when my ins and outs are calculated they will simply take into account what my monthly payment is on the car or will they look at the total amount of the contract and take that off??
I need a car, not going to go crazy (£13k) I reckon, but want to do it with the least impact on a future mortgage application as I can.
I appreciate I could buy a shed for a while until I know what’s happening but this could be 5 weeks or it could be 6 months before the house thing happens plus they often are a false economy and won’t really provide the enjoyment I get from driving/owning something a little special.
Si
It's the monthly payment that gets taken into account, not the size of the agreement...........After a bit of advice, historically I have always used a personal loan (high street lender) to fund my car purchases. My most recent stream of buying came to an end on the 30th Dec and I have quite enjoyed being car free, although dragging myself out of bed at 5am in the morning to get on the bike and cycle to work hasn’t always been easy but done me the world of good.
Whilst I would love to continue as I am my workplace is moving beyond what I would deem a reasonable cycling distance and being a petrol head I can’t really be without a car for too long.
There may be a potential house move in the next 6 months, we are currently on the market and have our eye on something but these things have a habit of not always playing out how you would hope.
That being the case I want to purchase a new car and am considering a PCP for the first time (ability to put little down and have sensible repayments) on a 1 year old car with 5k miles on the clock.
If I take out a PCP how will that realistically affect my mortgage potential - will it just be a case of when my ins and outs are calculated they will simply take into account what my monthly payment is on the car or will they look at the total amount of the contract and take that off??
I need a car, not going to go crazy (£13k) I reckon, but want to do it with the least impact on a future mortgage application as I can.
I appreciate I could buy a shed for a while until I know what’s happening but this could be 5 weeks or it could be 6 months before the house thing happens plus they often are a false economy and won’t really provide the enjoyment I get from driving/owning something a little special.
Si
Apologies for not responding, I didn’t get any notifications on email?!?
Ok so seems the preferred route is to buy a shed for the duration of possible move - I can kind of see this although the gamble of any repairs/breakdowns does play on my mind a little.
In 6 weeks my place of work changes, I am currently cycling everyday which is lovey and doing me the world of good but in 6 weeks that becomes impossible due to increased distance.
I enjoy my cars and always have, there is a danger that if whatever I buy isn’t ‘interesting’ or ‘fun’ to some degree it will not last and become a chore.
In terms of buying something newer/smarter does it make any difference whether I did a PCP or PCH in terms of my ability to borrow on paper?
Tempted with an Abarth, owned one before and loved it, all the car I really need to be fair. They are doing some PCH deals of £599 down and £199 a month which seems doable, Rick the PH box has have peace of mind around warranty, newness etc.
Si
Ok so seems the preferred route is to buy a shed for the duration of possible move - I can kind of see this although the gamble of any repairs/breakdowns does play on my mind a little.
In 6 weeks my place of work changes, I am currently cycling everyday which is lovey and doing me the world of good but in 6 weeks that becomes impossible due to increased distance.
I enjoy my cars and always have, there is a danger that if whatever I buy isn’t ‘interesting’ or ‘fun’ to some degree it will not last and become a chore.
In terms of buying something newer/smarter does it make any difference whether I did a PCP or PCH in terms of my ability to borrow on paper?
Tempted with an Abarth, owned one before and loved it, all the car I really need to be fair. They are doing some PCH deals of £599 down and £199 a month which seems doable, Rick the PH box has have peace of mind around warranty, newness etc.
Si
SiT said:
Apologies for not responding, I didn’t get any notifications on email?!?
Ok so seems the preferred route is to buy a shed for the duration of possible move - I can kind of see this although the gamble of any repairs/breakdowns does play on my mind a little.
In 6 weeks my place of work changes, I am currently cycling everyday which is lovey and doing me the world of good but in 6 weeks that becomes impossible due to increased distance.
I enjoy my cars and always have, there is a danger that if whatever I buy isn’t ‘interesting’ or ‘fun’ to some degree it will not last and become a chore.
In terms of buying something newer/smarter does it make any difference whether I did a PCP or PCH in terms of my ability to borrow on paper?
Tempted with an Abarth, owned one before and loved it, all the car I really need to be fair. They are doing some PCH deals of £599 down and £199 a month which seems doable, Rick the PH box has have peace of mind around warranty, newness etc.
Si
In short:Ok so seems the preferred route is to buy a shed for the duration of possible move - I can kind of see this although the gamble of any repairs/breakdowns does play on my mind a little.
In 6 weeks my place of work changes, I am currently cycling everyday which is lovey and doing me the world of good but in 6 weeks that becomes impossible due to increased distance.
I enjoy my cars and always have, there is a danger that if whatever I buy isn’t ‘interesting’ or ‘fun’ to some degree it will not last and become a chore.
In terms of buying something newer/smarter does it make any difference whether I did a PCP or PCH in terms of my ability to borrow on paper?
Tempted with an Abarth, owned one before and loved it, all the car I really need to be fair. They are doing some PCH deals of £599 down and £199 a month which seems doable, Rick the PH box has have peace of mind around warranty, newness etc.
Si
- The costs of any (reasonable) repairs to a shed will likely be far less than a £13k car. If they exceed this, buy another shed.
- As Sarnie points out, it's the monthly payment that gets factored in, not the value of the agreement. The lender's calculation assumes that this is a continuous payment regardless of the agreed settlement date
- There are plenty of good cars available for <£2k that will get you by
- If said car does not turn out to be 'interesting' or 'fun' by other and save £9k.
- Buy the PCP'd 1 Series when you have the house secured (if you can afford it).
My 2p.
Just wait until the mortgage is through.
I was in a similar situation knew I could afford both the mortgage and the car I was gonna get but ran an old old hatch until the mortgage was through.
Then once the house was mine and I knew what I had left montly getting a loan for the car wasn't an issue.
Doing it the other way arround won't look good.
I was in a similar situation knew I could afford both the mortgage and the car I was gonna get but ran an old old hatch until the mortgage was through.
Then once the house was mine and I knew what I had left montly getting a loan for the car wasn't an issue.
Doing it the other way arround won't look good.
Something else to consider, my credit rating took a spanking when I moved and it took ages for the electoral roll to sort itself out again. As soon as that was fixed, my rating recovered over night.
I know lenders don't look at the credit rating number, that's just a gimmick to satisfy the public - but I did find that my pre-approved loan offers went from "100% to get 3%" to "60% to get 7%" during that timespan.
I think you could game it by applying for your personal loan about 30seconds after getting the house keys in your hand
I know lenders don't look at the credit rating number, that's just a gimmick to satisfy the public - but I did find that my pre-approved loan offers went from "100% to get 3%" to "60% to get 7%" during that timespan.
I think you could game it by applying for your personal loan about 30seconds after getting the house keys in your hand
The amount you can borrow is all based on affordability. I've seen it lots of times where if a client is on say 20kpa a car loan of £150pm instantly affects what they can borrow. If though your on 30/40kpa or more it wont change what you can borrow but a car loan of maybe £350 will start to reduce it. NatWest are pretty good at 'ignoring' credit commitments up to a point. I say 'ignore' as you of course still declare them but they make no difference what so ever to what they will lend you.
Just played about with an example, £30,000 earnings, 30yr rep mortgage, no out goings Natwest will lend £145,500. With a loan up to £300pm it makes no difference. A loan of £350 & it reduces to £142,500. A loan of £400 & its now £135,200. Remember the outstanding balance of the loan isn't important as mentioned previously, just the monthly commitment.
Other mortgage lenders will be different & if you have kids, credit cards etc that will all be taken into account & can also affect the end result but it gives you an idea.
Just played about with an example, £30,000 earnings, 30yr rep mortgage, no out goings Natwest will lend £145,500. With a loan up to £300pm it makes no difference. A loan of £350 & it reduces to £142,500. A loan of £400 & its now £135,200. Remember the outstanding balance of the loan isn't important as mentioned previously, just the monthly commitment.
Other mortgage lenders will be different & if you have kids, credit cards etc that will all be taken into account & can also affect the end result but it gives you an idea.
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