Car ‘Buying’ and Mortgage help

[donblako]

Hi,

My Jaguar XF lease is due up in 2 months.

I’m looking to buy a new house mid / end of the year where I’m pretty sure I’ll be the amount I want to borrow, eg 4-5 x salary.
Affordability is not an issue.

With this in mind what will reduce the amount I can borrow more; pcp, lease or hp. Probably against 25-30k car

Appreciate any input,
Mark

[chrisch77]

It is your monthly payments that will effect the mortgage company’s assessment of the affordability of your mortgage application, it doesn’t matter what type of loan/lease you are paying against.

[Jag_NE]

Unfortunately affordability is a potential issue, at least in the opinion of the lender. To be on the super safe side by a shed for cash to tied you over for a few months so you have no payment at all.

[Krikkit]

Jag_NE said:

Unfortunately affordability is a potential issue, at least in the opinion of the lender. To be on the super safe side by a shed for cash to tied you over for a few months so you have no payment at all.

Definitely agree with this- hand your lease car back and buy something cheap for a few months, that way you max out the affordability by having greater regular disposable income

[Welshbeef]

Give car back/end of term and literally buy a shed car. Get the mortgage done find the house and live with said shed until transaction is all done and dusted.

Actually use the heap to as an extra removal vehicle and dump duties for the new pad.

Then buy whatever you want car wise.

[WonkeyDonkey]

You might actually then realise that shedding isnt so bad! At least I didnt when I bought my house, still got the shed that cost the equivalent of 3 monthly payments!

[Miserablegit]

As everyone else has said - keep your outgoings to a minimum to make it easier on the mortgage application.
Buy a shed v8 jag for the summer months. Remember the mortgage company run the numbers and the greater the outgoings the greater the chance of computer says no even if you “know” you can afford it.

[CRA1G]

It's a funny old thing is this credit scoring? I've lived in the same house for 23 years just paid the mortgage off no credit card or other debt but my credit scoring has dropped...?

[Shaw Tarse]

CRA1G said:

It's a funny old thing is this credit scoring? I've lived in the same house for 23 years just paid the mortgage off no credit card or other debt but my credit scoring has dropped...?

That's why I use a credit card & have a bit of a mortgage

[SiT]

I recently asked similar in the ‘finance’ area, this may be of use -

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Si

[joropug]

Companies like Santander have decent mortgage calculators. You can add in monthly payments towards cars and have a play around.

I'm going through the same at the moment, we want to lease something for the wife after we move but we can borrow more if we don't do this before hand.

I think for mortgages it's more about how much you earn versus definitive loan/card payments , as opposed to credit scores.

[Jamescrs]

I'm currently going through something similar albeit mine is a remortgage rather than a new purchase.

My experience is they look at all outgoings regardless of the type of finance. They went through my wage slip and I have a pretax deduction of £220 which I had to account for, as it happens it's a payment into a savings plan so not an issue. But that's just one example of how they scrutinise everything.

I could do with replacing my aging V60 but I'm holding off till later on in the year when the remortgage is done and dusted.

In your position I'd look at shedding for a few months

[VR99]

I'm in a similar boat...or at least could well be later this year so plan to do the same as suggested here. When current shed is no longer economical IL buy a cheap car cash so as not to take on any further monthly financial commitments be it a personal loan/ financing/ leasing etc

[Alucidnation]

The FCA have seriously tightened up on lenders so affordability is vey much at the front of their checks.

In fact, I think the linked of Experian are pretty worthless now, except maybe for lenders to perform security checks and have a ‘quick look’.

[Rick-fgpe0]

Didn’t read every post so apologies if this has been covered.

Pcp is a finance agreement which shows on your credit file as a loan.

Lease is a finance agreement but does not show on your credit file. It will be considered a cost and for a mortgage, will show in your 3 months bank statements, but from a scoring perspective has no impact (so no impact for other credit applications like loans or credit cards where actual bank statements are not used).

Bear in mins though, that a score is just a way to represent your perceived risk to a lay person and each mortgage company has their own criteria which is why some people with a 900 score get declined a mortgage with company A, whilst others with an 800 score are accepted with company B.

Historically, and anecdotally, Halifax are quite willing to let small credit history blemishes slide compared to a lot of the other big lenders.

Hope this helps.

[steedy27]

Just today I've bought a car as my lease is going back next week. I wanted another lease however with a looming house purchase I was shocked how much it reduced what I could borrow.

[quinny100]

Just use the online calculators to establish what effect a monthly payment will have on the amount you can borrow. They’ll give you a very good idea where you’re at. If it’s marginal then it may be wise to leave the car until after the mortgage is secured, but otherwise I’d crack on.

Lenders affordability checks are pretty sensible in my experience. If you have no other significant monthly commitments a car shouldn’t be a problem.

[ZX10R NIN]

As others have said, let the lease end buy a reliable set of wheels & then once your Mortgage is sorted then work out where you're at.

[quinny100]

Rick-fgpe0 said:

Lease is a finance agreement but does not show on your credit file.

This is not true.

I had a car on PCH through Mercedes Benz Financial Services and that showed on my credit file from Experian and Equifax.

There is a difference as to how PCP/HP and PCH appear - PCP will show the balance on your credit file as the remaining payments plus the balloon/GMFV/final payment. HP will show the full outstanding balance. PCH will show the balance as the total amount of payments remaining under your PCH agreement, so will usually be much lower (when comparing the 3 methods for buying the same new car). This may have an effect if the lender looks at the total amount of credit you already have and uses that for scoring.

[Alucidnation]

Interesting you say that as we have two leases at the moment and neither are showing on Experian or Equifax!