Does your property show up on a credit file??

I’m looking for a mortgage and my car which is on a PCP shows up as a liability at £38K, which they reduce off my total amount I can borrow. What bugs me is the car’s on a PCP and if they came and took it tomorrow it would still raise book value of £30k, so why don’t they offset the value outstanding on your credit file.

Questions is, does the outstanding amount on your mortgage show on your credit file???

Yes, your mortgage balance will show on your credit file (although, there are three credit referencing agencies (Experian, Equifax and call credit) and it may not show on all).

Regarding your PCP, they will take into consideration the monthly payments, not the £38k liability. This is due to the new way mortgage affordability is calculated.

I’ve just been going through a mortgage application recently and I didn’t see anything that related to the value of either property owned or the amount of any debt. All they were interested in was what the monthly repayments were for everything, including any other loans etc, and therefore whether you could afford the repayments on the mortgage. So having payments relating to a car would certainly impact what they were willing to lend, but it doesn’t seem like they’d actually care about the amount of the loan or the value of the property it was loaned for. In my case I don’t have another loans – quite the opposite as I own a house and several vehicles outright. That didn’t seem to be a factor (positive or negative) in the application process.

What I did find slightly annoying was that the affordability test came back as saying the minimum affordable term for the mortgage I was taking was 6 years, and the mortgage advisor seemed to have an issue at first with me not wanting to do that – but instead taking the mortgage over 20 years. It took several goes at explaining to him that I did actually want to have a life while I was repaying the mortgage, and not just be throwing every spare penny into it!

I’d imagine that the reason they do that is that you are going to be servicing a debt of £38k. It doesn’t matter whether the asset you secured it against is worth less, more, appreciating or deprecitating that is still the amount of debt that you are servicing. Mortgages are slightly different as the debt that you are servicing does reduce with time so the check would be made against the amount of captial outstanding (assuming that its a capital repayment mortgage) but if it is any other type (e.g. interest only with an investment product to pay it off) then the total debt doesn’t diminish so I’d guess that they would use the entire amount.