Apply for credit so near to remortgage date?

pauliewalnuts

Folks,

New to the board. Hi.

I have a mortgage with Northern Rock, which is due to reach the end of its fixed rate deal in April '09. I also have about £7400 outstanding on a credit card. I am paying 24% on the credit card. My question is: should I apply for a new, 0% balance transfer credit card, even though there are less than 6 months to go before my remortgage is due? Wouldn't it affect my chances of obtaining a good rate, even if I am accepted?

To elaborate on my situation:

-I am 26, single, and earn about £50k per annum
-I paid £143k for my house in Sept '07, using a Northern Rock mortgage consisting of around £138k mortgage + 5% deposit (directly loaned from NR) + £15k loan in pocket + fees
-Interest rate I fixed at is 6.68%
-The home required renovation, so I took out a £15k loan from another bank, which I am currently repaying
-I overspent on the renovation, so have £7.4k on the credit card, some of which was cash advances
-I have never missed a payment for anything, ever.

When I originally got a mortgage, about a week before the credit crunch hit, I struggled on my own to be accepted...I had applied for various accounts, cards etc in previous months and even a basic 'search' on my credit file was being held against me by the banks (however illegally that may be). Eventually through a mortgage supplier I obtained a mortgage with NR, but at poor rates, even by their standards. In any case, once bitten twice shy...I reckon on £7400 I will pay up to £1000 in interest over the 6 months, but if I transferred it now I would pay a lot less. I could channel more money toward paying off the card but then I would have a negative amount in my current account, even though it is interest free, which the banks also hold against me when the time comes to remortgage.

My main concern is that I could save a few hundred on the card just now, yet because I made the credit application, I could pay 1% more on the remortgage, hence costing me far more in the long run. Even worse would be if they rejected my application for the card...

And I cannot even check my credit score as they hold that against you as well...

_Andy_

It won't make a difference (applying for the card).

The problem for you in terms of remortgaging is going to be the lack of equity (which may well be even worse when your deal ends).

_Andy_

pauliewalnuts wrote: »

And I cannot even check my credit score as they hold that against you as well...

If by that you mean have a look at your own credit files, it won't affect anything.

pauliewalnuts

You see, I had always thought it wouldn't make a difference....except that when I went to get a mortgage I was refused on the basis of having made a credit search of my own details....

...I only got the mortgage after enlisting a mortgage advisor who was able to phone the bank and put pressure on them...

Toughluck

As andy said it may be academic as you may not be in a positon to re-mortgage based upon the lack of equity that may be in your property. Including the unsecured N Rock loan, if you have less than 10% equity in where you live I would waste mortgage searches on yourself.

pauliewalnuts

Toughluck wrote: »

As andy said it may be academic as you may not be in a positon to re-mortgage based upon the lack of equity that may be in your property. Including the unsecured N Rock loan, if you have less than 10% equity in where you live I would waste mortgage searches on yourself.

Thanks for the replies folks, but I should have some equity for sure. After I bought, two almost identical houses sold for 167k and 170k in recent months....the house price crash hasn't hit us here in Edinburgh as hard as it has hit you guys down south (yet...)! My house has the bonus of a huge garden so I would expect it to come in at around 175k.

Toughluck

Honestly then it is your gamble on the survey amount. Albeit Edinbugh or where-ever. bought for £143K in Sep last year and now worth £175K. I would like to be proven wrong but you would have to have had major major structural changes to the property to increase the value that much over the course of 13 months (even if you did get it as a bargain as surveyors look at sold prices and will probably base their valuation on what is on the market against what you paid for it).

pinksparkle_2

Can anyoone help me....When my fixed rate finishes with NR will i be credit checked all will they just put me on another fixed rate or their variable???

Pinksparkle x

_Andy_

pinksparkle wrote: »

Can anyoone help me....When my fixed rate finishes with NR will i be credit checked all will they just put me on another fixed rate or their variable???

Pinksparkle x

If you stay with them they won't do a new credit check.
I may be wrong but I think NR are only offering existing clients the SVR at the moment.

beecher

pauliewalnuts wrote: »

Thanks for the replies folks, but I should have some equity for sure. After I bought, two almost identical houses sold for 167k and 170k in recent months....the house price crash hasn't hit us here in Edinburgh as hard as it has hit you guys down south (yet...)! My house has the bonus of a huge garden so I would expect it to come in at around 175k.

I would be stunned if you aren't in negative equity. It seems common to think that other areas are the only ones being hit, but Edinburgh is by no means immune.

I think it'd be a good idea to go onto the Debt Free Wannabee site and see if you can make a dent in your debts by April - on 50k you'd surely be able to pay off a good deal.

pinksparkle_2

_Andy_ wrote: »

If you stay with them they won't do a new credit check.
I may be wrong but I think NR are only offering existing clients the SVR at the moment.

Im sorry but im not really clued up with all this, what does SVR mean?

Pinksparkle x