how many credit cards do you have?

monkeysnail

Hi everyone.

Need to come up with £50K by Sept 2006. I want to know how many credit cards can you have without destroying your credit rating.

I feel that it's easier to comeup with a£50K on credit cards (between me and my husband ) rather than borrowing a loan to that amount.

I would appreciate all your insights

[Deleted User]

I think you mmust be crazy if you're contemplating running up a debt of 50K on credit cards. Even if you go for 0% int on purchases, what will you do when it runs out? Perhaps you have a clever plan which I'm not aware of!!!

Rafter

Getting that much within a year isn't going to be impossible but it will depend on how good your credit rating is and how much you are earning.

Card companies are getting more cautious about lending more than 50% of salary or more than £25k to any individual, so unless you are earning £50k + each that could be a barrier to your plan.

Perhaps you could tell us what you need the money for?

You are probably only going to get that kind of sum through a combination of loans and cards and even then the interest bill and repayment will be nasty unless you can afford to repay quickly or subsequently secure on a property so you can spread the payments out longer and get a low rate of interest.

Good luck and post more details if you want more detailed advice.

R.

monkeysnail

Thanks for your concerns.

It's a deposit money for a purchase of a flat. made reservations yesterday. SInce it's off plan, completion is Sept 2006. Buy-to-let mortgage (15% deposit)

The purchase price is £320:K but valued at £420K.

I know the valuation of this as I have the same 3 bed flat in the same development which was valued at £400K last August 2004.

bob_builder_2

monkeysnail wrote:

Thanks for your concerns.

It's a deposit money for a purchase of a flat. made reservations yesterday. SInce it's off plan, completion is Sept 2006. Buy-to-let mortgage (15% deposit)

The purchase price is £320:K but valued at £420K.

I know the valuation of this as I have the same 3 bed flat in the same development which was valued at £400K last August 2004.

Don't do it!

worried_and_confused

monkeysnail wrote:

Thanks for your concerns.

It's a deposit money for a purchase of a flat. made reservations yesterday. SInce it's off plan, completion is Sept 2006. Buy-to-let mortgage (15% deposit)

The purchase price is £320:K but valued at £420K.

I know the valuation of this as I have the same 3 bed flat in the same development which was valued at £400K last August 2004.

So how do you plan to pay it back? It sounds rather risky. Even if you can raise the £50k on 0% offers (which you may be able to do), these generally only last 6-9 months and I would have thought you are going to struggle to stooze that amount of cash indefinitely unless you have a very high income and excellent credit rating.

blacksta

i would advise that you consult your financial adviser as this plan could wreck or make you.

"Good intentions coupled with foolish method would lose you money"

Please seek advise

Rafter

Monkeysnail,

You should really think long and hard about building up an investment portfolio of buy to let without any capital or other investments behind you.

Depending on where it is, the value of flats has fallen or stagnated and you cannot rely on strong capital growth anymore. Unless you can easily cover the mortgage payment through rent, think really hard about whether this is wise.

If the flat really is worth £100k more than you are paying for it, why is the developer selling it to you? Was teh £400k valuation you got before prices slowed down and was it 1 estate agents valuation at the height of the property boom and therefore truly objective?

If the value of your existing property has risen that much, why not remortage that to 85% to free up the deposit for the next property, if that is really what you want to do?

R.

Clariman

monkeysnail wrote:

The purchase price is £320:K but valued at £420K.

I know the valuation of this as I have the same 3 bed flat in the same development which was valued at £400K last August 2004.

Valued by who ? An independent qualified professional who is totally independent of the developer I hope.

Also, the valuation of £400K 14 months ago could be pretty meaningless. In some parts of the country, property prices have declined since then ... particularly on new-build flats.

Clariman

monkeysnail

It was valued by Bank of Scotland August 2004 for 400K and bought it for March 2003 at £285K. Got a penthouse unit in the same development at £450K and valued at £595K by another bank.

Both have been remortgaged at 85%LTV using self cert mortgages.

The equity released (60K) from the 400K valuation was used to pay the deposit for the penthouse. The 66K equity release from the penthouse was used to pay-off all the credit cards and loans I have. Out of 6 credit cards, 5 are settled and we only kept 1. Out of 4 loans, 2 have been fully paid.

The mistake I made was to close all the cards after settling them. Now, I am struggling to find finance to do this again.

When it is completed, I plan to remortgage them and rent them out.

By the way, the unit that was valued at 400K is now being rented out and the tenants rent covers the mortgage.

I know it is a risk, but like any business, it has to come with some risks or else everybody will be doing it.

So, you guys, do you think it's possible to raise 50K in 1 year between me and my husband?

monkeysnail

By the way, I plan to pay off the 50K again by remortgaging the units when it's completed.