Stooping / buying a property

Reg_Smeeton

Hi all,

Just interested in your thoughts on the following:

Ive stoozed approx £9k across 3 cards, with the 0% periods ending at staggered periods beginning April 2025.

In the next year I am intending to upsize from a one bedroomed flat to buying a small house with my partner.

In general terms, is it feasible to continue to maintain/build my stooze pot whilst taking out a new mortgage or would it be more beneficial to reduce the amount owed on the cards? 

eskbanker

Difficult to generalise in the absence of much more detail about your financial circumstances and how stretched you're likely to be, but perhaps worth discussing the situation with one or more mortgage brokers?

Reg_Smeeton

Thanks eskbanker. I do intend to discuss with brokers but just fishing for some additional generalised opinions/guidance!

My current mortgage payment is £464/month and I owe £90000. Would be looking to borrow approx £200k for my next property, although this would be shared with my partner.

Currently making minimum repayments of approx £100/month on the cards, but still have a monthly headroom of about £600 after all bills are paid, discretionary spend etc.

My cash savings cover the stooze pot and more, but having got the ball rolling and just starting to see some reasonable return on my efforts I’m reluctant to pay down anything before I have to unless there is some compelling reason to do so!

Brie

You'll need to consider if your income and that of your partner will be enough to cover the new mortgage plus all the credit you are using including the credit you have on the cards or anywhere else that your are not using.

So you currently have £9k debt on the cards but what is the credit available?  You might be able to afford to pay off the £9k but what if you had £30k available to spend on the cards and went out and bought a luxury cruise or something the day after you buy the new place?  Could you afford that and the mortgage?  Likewise what does your partner have?  Overdrafts?  Phone contracts?  Car insurance paid monthly?  These will all be taken into account along with all your regular bills.  

Not saying you need to pay down your card debt but you might look at reducing the credit available that is not being used.  

cymruchris

There's no doubt that the less 'used' credit you have at the time of mortgage application compared to the 'credit available' does have an impact. As above really though, the best person to address it would be a broker. I would guess that the more of the debt is paid and clear at the application stage, the better chance you have of getting a better deal. (Yes I know you've got the savings to cover it - but I think most mortgage providers see debt as debt - even if you're using it to make money). So I'd be planning on clearing the cards with your savings at least a month before your mortgage application to give the data time to filter through on the CRA updates.

Reg_Smeeton

Many thanks both - to clarify, is it better to have a lower credit utilisation of a higher total credit limit, or a higher utilisation of a lower credit limit?

cymruchris

Generally a lower utilisation of a higher limit is preferable.

daivid

For your original question I'd consider what is at stake. Closing the stooze pot and having to start again could lose a few hundred pounds interest, if you can't be sure of getting the mortgage you need you could lose the property you want or get a worse mortgage deal which may cost far more a month extra over the stooze profits. That said eligibility checkers may give a good indication and I've twice been approved for mortgages whilst holding a stooze pot. Once accidentally and once on purpose, £6k and £12k respectively. 

Emily_Joy

Reg_Smeeton said:

Hi all,
Just interested in your thoughts on the following: Ive stoozed approx £9k across 3 cards, with the 0% periods ending at staggered periods beginning April 2025. In the next year I am intending to upsize from a one bedroomed flat to buying a small house with my partner. In general terms, is it feasible to continue to maintain/build my stooze pot whilst taking out a new mortgage or would it be more beneficial to reduce the amount owed on the cards? 

The most important unknown here is your deposit / LTV on your prospective purchase. If you are buying a property for £600K and put £400K towards deposit,  have a joint income that is roughly 2.5 times of your mortgage repayment, nobody is likely to care about £9K across 3 cards. As a part of mortgage application you get to declare your existing debt and whether or not you intend to pay it off. If you apply to mortgage provider directly without using a broker and speak with their mortgage advisor directly, they might be able to advise you whether you should clear your debt before the mortgage starts and this might play a role for your mortgage offer.

kempiejon

I reckon it better to carry minimum outstanding debt than when applying for a mortgage. I'm looking to re-mortgage in about 18 months and last month topped up some stoozing on 12-14 month terms so I'll have them clear a few months before I apply, giving time for the accounts to update. Don't worry about missing out on some stoozing profits. Worry about getting the mortgage.

When you have the mortgage you can see if you can juggle some stoozing towards early repayment. A chum of mine has done that I never have.