Paying for deposit on credit card.

Deano4174 · 2 January 2006 at 5:35PM

Hi, im looking to apply for a mortgage and im going to pay for the 5% deposit of £5000 on my credit card then transfering the £5000 to a 0% balance transfer card. would anyone reccomend this or am i better of transfering the debt to a life of balance card and if so can any one reccomend any life of balance card?

Thanks.

Dean.

mummytofour · 2 January 2006 at 5:47PM

I was under the impression that you could not borrow money to use as a deposit for a house? something to do with the deposit not being your own money.

Deano4174 · 2 January 2006 at 5:51PM

not sure. so you are saying that i cant pay the deposit on my credit card?

grumbler · 2 January 2006 at 6:00PM

mummytofour wrote:

I was under the impression that you could not borrow money to use as a deposit for a house? something to do with the deposit not being your own money.

Never heard about this ...

Deano4174 wrote:

... im going to pay for the 5% deposit of £5000 on my credit card ...

Extracting cash from a credit card can be very costly, in particular with regard to interest rate - unless you use Super Balance Transfer:
What is a Super Balance Transfer?
REVENGE! Make Free Cash from Credit Cards

... then transfering the £5000 to a 0% balance transfer card

Are you sure that you will be able to get a card with the limit needed?

would anyone reccomend this or am i better of transfering the debt to a life of balance card and if so can any one reccomend any life of balance card?

This is up to you to decide: The Best Balance Transfers: cut the cost of existing credit card debts .
Also: http://www.stoozing.com/0fees.htm

However, I don't think it is a good idea to borrow for a deposit ...

Bossyboots · 2 January 2006 at 6:04PM

mummytofour wrote:

I was under the impression that you could not borrow money to use as a deposit for a house? something to do with the deposit not being your own money.

The increasing trend is for deposits to be borrowed from family or friends but whether that would be treated differently from borrowing on finance I don't know.

Your conveyancers would need to accept payments by credit card as well so you would have to shop around for that but I am not sure whether any would risk taking the deposit on a card with the risk of a potential chargeback (albeit a small one in these circumstances as you would have to justify to your card provider before it took place).

Bossyboots · 2 January 2006 at 6:08PM

grumbler wrote:

Extracting cash from a credit card can be very costly, in particular with regard to interest rate - unless you use Super Balance Transfer:

It would show up on the statement as a payment to a solicitor/conveyancer though rather than a cash withdrawal so I don't think this would apply. Would the card company know whether it was for a deposit or simply fees? I don't how they would and the fees would not be chargeable as a cash withdrawal so I think they would get away with that one.

sarah_elton · 2 January 2006 at 6:17PM

I had a friend put his deposit on credit card, so it can certainly be done though not certain of the ins and outs.

I'm buying at the mo, and after being swayed to a magical cashback card by Martin (thanks!!), am putting solicitors fees on it (to be paid off straight away albeit). There's definitely solicitors that accept payment by cc these days so you shouldn't have too much trouble finding one.

Generally though you should be slightly cautious. How long will it take to repay £5k on credit card for you? There's persistent rumours 0% deals will be on their way out, so be sure you can transfer for long enough to pay it off without getting in trouble.

Life of balance transfers - aren't they usually around 6-7% mark? If you go this way, would you not be better off with a 100% mortgage instead? Someone more intelligent than me will answer that question for you in a bit I'm sure.

carolineoretagu · 2 January 2006 at 6:22PM

I plan to do the same! There are two options for me - either - apply for one of the cards that have the super balance transfer facility to make sure that I can get the limit needed - then transfer the balance into my account (this will have to be done after the formal mortgate offer has been approved to avoid any hassles with the credit check) or, withdraw the cash on the existing credit card and put in the bank. As soon as that is done then the balance can be transferred onto to a card with 0% rate.

Paying for deposit on credit card.

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