When to stooze with upcoming mortgage application

djacobson82

I have 0% BT card with £10k on it coming to an end on 1st January. I would like to apply for another card shortly to get it in place for then. I've got good credit rating and never had problem previously apllying for cards

However am just starting process of moving house over next few months (have just had offer accepted and will be applying for mortgage soon and hope to complete in the new year)

when is a safe time to apply for a new card?

• Now - as havent applied for any others in over 6 months
• After mortgage is accepted
• after exchange on house - may end up paying interest on BT card for a month
• after complete on house - may end up paying interest for a few months

will having this £10k debt be an issue for mortgage application, or can i just say it is a 0% deal?
will they say that I will need to pay minimum payment every month and it will affect affordibility

Thanks for your help

YorkshireBoy

I wouldn't think 2 credit card searches in the preceding 6 months would be a major problem to a mortgage application.

However, the £10K debt will most definitely be taken into consideration. It's likely that the mortgage company will deduct 36% of it (£3,600 and based on 12 months of 3% minimum payments) from your stated salary before applying their lending multiples.

There's one major drawback with your plan to apply for the card before the mortgage is completed. If the new provider records the new balance quickly and the old provider is late with updating the zero balance information, then your credit report will show that you owe £20K, not £10K, so they'll (initially at least) want to deduct £7,200 from your salary!

djacobson82

my minimum payment is 1% of balance - it is a halifax card. If I give details of that, will i be able to only take off £1200

YorkshireBoy

djacobson82 wrote: »

my minimum payment is 1% of balance - it is a halifax card. If I give details of that, will i be able to only take off £1200

The lender does the 'taking off', not you.

Think about it. Only MBNA and Halifax have 1% minimum payments. Everyone else has 2-3% (and some, eg Amex, even have 10%). For all the mortgage company know, the next card will demand circa 3% so that's, in my experience with YBS, what they'll deduct.

You could try appealing any rejection/conditions (in the form of memorandum of understanding's) but to be honest why would you risk losing your dream home for a bit of stoozing? If you're borderline on (the lender's assessment of) affordability, then repay the card now, and start again after the mortgage is in the bag.