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Mortgage application with credit card debt?

(5 Posts)
Aquiver Wed 21-Oct-15 15:11:37

Hiya,

DH and I are currently in the process of saving for our next home deposit. We would like our next move to be to our 'family' home and we are looking in the horribly expensive SE London area.

We both have approx £4k on 0% credit cards (one each). We are also rigorously saving (as we are keen to build up our next house deposit in order to move sometime in 2017).

We currently have approx £40k in savings.

Is it definitely worth paying off our credit cards first, so that they are nil or very low balances when we apply for a mortgage in 2016/17)? Would our current balances have a significant impact at application stage?

Thanks!

TheOriginalWinkly Wed 21-Oct-15 15:15:31

DH and I both owe money on CCs, him around 1k with interest, me just over 2k at 0%. Our financial advisor didn't suggest clearing them and we had no issues with either mortgage application (first purchase fell through due to buyer)

OreosOreosOreos Wed 21-Oct-15 15:17:30

We recently remortgaged and had £10k on a 0% cc during the process and it wasn't an issue. Both our credit ratings are good, I think the only thing it will effect is the affordability calculator, as your minimum payments will be taken into account.,

Aquiver Wed 21-Oct-15 21:12:29

Thanks both - that's handy to know

Imperialleather2 Thu 22-Oct-15 07:34:59

I think it depend on how near you are to maxing out on your mortgage.

If you could afford to borrow way more then it won't be an issue however I understood that they multiple the total you owe by the same multiple you want to borrow and deduct it
So if you want to borrow 3x salary and ypu owe £4k then they will deduct £12k off what they'll lend you.

Speak to an IFA

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