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Nationwide mortgage if I cancel my credit cards…

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Nationwide will only give me the mortgage I want if I pay of my £12,000 on credit cards. I've got over £30,000 in savings (and the credit card debt is on 0% APR), but they won't listen. Any way around this? They'll give me a month to close the cards. Will they check to see if I've cancelled the credit cards?

Comments

  • dougk_2
    dougk_2 Posts: 1,403 Forumite
    Nationwide are only being responsible....Abbey said the same for us - they still see 0% credit as credit!

    Nothing stopping you using it again or getting another card once it has been paid off though....

    I would pay it off and send Nationwide copy of next statement to prove it - then do as you like.

    Personally I'm not bothering with the cards again and I think stoozing won't be about for much longer.
  • Joe_Bloggs
    Joe_Bloggs Posts: 4,535 Forumite
    It may take more than a month to close a credit card. Perhaps having a zero balance with 0% deals that are closest to expiry anyway will be good enough. You would be throwing away around £250 assuming basic rate tax, 5% interest and 6 month 0% duration. If you chose to close be sure to state that the reason was for mortgage application reasons and that you love the card company.

    You will likely be able to start up again once your new financial situation is settled.
    J_B.
  • Thanks for the advice.
  • MarkyMarkD
    MarkyMarkD Posts: 9,912 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    dougk wrote:
    Nationwide are only being responsible....Abbey said the same for us - they still see 0% credit as credit!

    Nothing stopping you using it again or getting another card once it has been paid off though....

    I would pay it off and send Nationwide copy of next statement to prove it - then do as you like.

    Personally I'm not bothering with the cards again and I think stoozing won't be about for much longer.
    They're not being responsible at all - it's completely stupid.

    There's no material difference between having £30,000 on 0% with card companies and the matching £30,000 in savings, than having £30,000 on unused credit limit available on 6 credit cards - which a huge proportion of the population do. Both give you exactly the same ability to go and blow £30,000 and then default.

    In fact it's actually far better because people who stooze are not the sort of muppets who run up £30,000 of real credit card debt at high interest rates which they will then fail to repay.

    I am in a very similar situation and about to remortgage and I will be incandescent if I am unable to get the lender to see sense over this. Fortunately it won't be either of the lenders mentioned above. But if push comes to shove, half of my 0%s end in the next 3 months anyway - but I'm not repaying the Capital One 18 month 0% one early for anybody.
  • dougk_2
    dougk_2 Posts: 1,403 Forumite
    I disagree - I think any credit is credit , regardless of whether you have the savings to pay it off.

    I must admit when I remortgaged and the bank insisted I cleared my card (despite being on 0%) I was not happy but after reflection I saw their point - if you have access to that credit what is stopping you blowing your savings and not being able to repay the debt?

    I would rather see credit cards be reviewed and revised and sensible limits set. Does anyone REALLY need a credit limit over £5000 as an individual (company maybe)?

    I believe stoozing will end soon and personally don't agree with it. Certainly SBT's will end I am convinced.
  • MarkyMarkD
    MarkyMarkD Posts: 9,912 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Because, Doug, exactly as you said yourself:
    Nothing stopping you using it again or getting another card once it has been paid off though....
    So why make you repay a balance you can draw down again the day after completion? It really does make NO difference.

    It would only be valid to make you repay cards if you had to close the account.

    And even then, anyone with a decent credit rating could re-open accounts and rebuild the same amount of debt very easily.

    Anyone who is inclined to blow all the savings and not be able to repay the debt is just as likely to fail to pay their mortgage in any case - I can't see for a moment how it worsens the risk for a secured lender who, after all, has the first claim on your house, which security is entirely unaffected by your unsecured borrowing.
  • jnd
    jnd Posts: 453 Forumite
    I am something similiar to you and also currently applying thru the Nationwide for a mortgage as well, even explained to the advisor what I was doing. I got accepted ok. He did say though before he hit the enter key to process the application that the system might return and say I'm over committed. Luckily for me it didn't. Did you go in and sit through the application process while it was being done?
  • bbruce
    bbruce Posts: 369 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    At least they don't turn you down flat which was worrying me.
    I'm in a similar position and this has delayed me applying to Abbey.
    Maybe I should go ahead and settle up if they say I'm over committed but they will make me an offer afterwards.

    Learn from the mistakes of others - you won't live long enough to make them all yourself.
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