How do lease car costs impact mortgage applications
Discussion
We're looking at moving house next year, which we've not done for 15 years. We have no personal debts other than my personally leased car, historically I've had company cars.
So was just wondering how the lease car impacts borrowing capacity, as we are potentially looking to stretch ourselves - is it the total cost of the car, or are the payments deducted from affordability calculations?
So was just wondering how the lease car impacts borrowing capacity, as we are potentially looking to stretch ourselves - is it the total cost of the car, or are the payments deducted from affordability calculations?
ashleyman said:
PCP, HP - Total Cost of Car + Interest.
Lease - Total cost of Payments Only
Not correct............do you think lenders are interested in the total cost of the car?Lease - Total cost of Payments Only
Edited by ashleyman on Wednesday 29th November 13:35
No.............just the monthly payment and it's impact on your net disposable income.
Sarnie said:
Not correct............do you think lenders are interested in the total cost of the car?
No.............just the monthly payment and it's impact on your net disposable income.
With a PCP/HP, the total cost of the vehicle loan will show up on a credit check, whereas with a lease it's only the total monthly payments. No.............just the monthly payment and it's impact on your net disposable income.
Sarnie said:
ashleyman said:
With a PCP/HP, the total cost of the vehicle loan will show up on a credit check, whereas with a lease it's only the total monthly payments.
Yes, but that has no bearing on a mortgage application, which is what the OP asked........ashleyman said:
Like I said, my mortgage advisor showed figures explaining how the amount owed affected our affordability.
I'm not here to argue, but that was my experience.
Well he was wrong.I'm not here to argue, but that was my experience.
Here are five affordability calculators;
https://online.accordmortgages.com/public/mortgage...
https://www.bankofireland4intermediaries.co.uk/aff...
http://www.halifax-intermediaries.co.uk/tools_and_...
http://www.leedsbuildingsociety.co.uk/intermediari...
https://rbsintermediaries.hdddirectsolutions.co.uk...
Not a single one asks about the total owed..............it's just not relevant.............only the monthly payments are...........
A lease car should make no difference but Pcp might, when I did my mortgage a few years ago they took the total owed into the figures.
And in the end I had to sell the car and provide proof car had been sold to get the mortgage to go through.
I would add this was a 95% mortgage and as a single buyer so very tight on funds.
And in the end I had to sell the car and provide proof car had been sold to get the mortgage to go through.
I would add this was a 95% mortgage and as a single buyer so very tight on funds.
Sarnie said:
Well he was wrong.
Here are five affordability calculators;
https://online.accordmortgages.com/public/mortgage...
https://www.bankofireland4intermediaries.co.uk/aff...
http://www.halifax-intermediaries.co.uk/tools_and_...
http://www.leedsbuildingsociety.co.uk/intermediari...
https://rbsintermediaries.hdddirectsolutions.co.uk...
Not a single one asks about the total owed..............it's just not relevant.............only the monthly payments are...........
The flaw in the calculators is it just looks here and now - so say you clear be car cost in 2 years then run that car for the duration of the remaining mortgage term. The mortgage co will wrongly just look at current spent/commitments. Here are five affordability calculators;
https://online.accordmortgages.com/public/mortgage...
https://www.bankofireland4intermediaries.co.uk/aff...
http://www.halifax-intermediaries.co.uk/tools_and_...
http://www.leedsbuildingsociety.co.uk/intermediari...
https://rbsintermediaries.hdddirectsolutions.co.uk...
Not a single one asks about the total owed..............it's just not relevant.............only the monthly payments are...........
Recently listened in on a mortgage application conversation.
Amused by some of the affordability questions, which even included, "How much do you spend on car parking?"
Nothing was asked about the depreciation cost of your car. In this particular instance, it would be a cost of £150 per month at present. Probably a much more significant expense than car parking, for most people.
Perhaps that question is not asked, because I guess very few people would know the answer.
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