Clear credit card before applying for new mortgage?

[peachypetite]

Hiya. We have 4K on a credit card which we paid for our honeymoon on. It's a 0% interest. We have been in our current house a few years and want to move somewhere bigger but I am wondering whether we should clear the debt first?

It's one of the questions my mortgage broker asked us. (Do you have any credit card debts or loans.) So it must have a bearing on how much they will lend you.

I was told some mortgage companies want credit cards clearing and some will deduct the amount of debt from your mortgage offer.

We only had £400 on our credit card when applying for our mortgage. The mortgage provider included a request in the terms that it was paid off in full by the time the mortgage was given. Perhaps just our provider, it seemed over the top to me as we always pay the balance off, which we could prove from the statements.

You can say you will pay it off before completion and then they don't include it in their assessment. That's always been our experience.

I've got the same issue but with a bigger debt.

Whether you need to pay it off depends on how tight you are on affordability. If you want to borrow a lot relative to income, it may make the difference.

If they will lend you want you want to borrow with the debt, there is no point paying it off.

We had 5 figures on credit cards and had no problem getting a mortgage with HSBC

We had the savings to clear the cards. But HSBC didn’t want them cleared - so we didnt bother.

We got a better rate by clearing ours which was about the same as yours.

If you can afford to do it, now is a good time.

We already have a mortgage with halifax, not sure if getting a new one is less strict than for a first time buyer? Interesting to see the mixed responses on here.

We got the best possible rate in the UK for our LTV with our credit cards unpaid (but covered in savings). Ours was a remortgage with a different lender, plus a new homeowner loan.

Like all things to do with mortgages, it will come down to your own individual circumstances and the attitude of your lender.

Do bear in mind that you may not get the best deal by sticking with your current lender - speak to a whole of market broker or use an online comparison service such as Money Saving Expert.

Good luck, I found the whole experience quite stressful!

Yes I'm really not looking forward to moving but want to be in a bigger house. We have had it valued and have made excellent money on it (based in London) and would be able to put down at least 20% deposit which I think will help us.

I've just got a mortgage with Nationwide through Land and Country - they also wanted the cc debt clearing on completion.