What looks best for Mortgage Application?

AnnaT_3

I currently have a £4,000 loan which I pay less than £250 a month back on and also a credit card which has just under £4,000 on it.

I have just over £4,000 in the bank and want to apply for a joint mortgage with husband.

Should I pay the credit card off? Or keep the 'savings' in the bank? Which will look better please?

VIGILANT22

depends on how much yr borrowing and salaries....that 250.00 will also be taken into consideration by the lender

AnnaT_3

I know but I can only afford to pay off one of them. So I wondered which one would be best or is it best to have the savings in the bank?

LittleMissAspie

Maybe it depends which mortgage you apply for. My boyfriend and I have applied for a First Direct mortgage and they never asked for any details on our savings. They only wanted info on our current accounts. So in that case it would be better to pay off the one with the higher interest rate.

AnnaT_3

Thank you - that would be the credit card then!

Does the fact I put about £200-250 a month to the credit card each month make a difference (i.e. when credit scoring me, can the bank see I pay more than the minimum payment amount)?

Sorry - so many questions!

VIGILANT22

with the loan they will calculate this and deduct from yr annual salary for income multiples...it depends on the ratio salaries to borrowing

Joe_Bloggs

It might be worth adding up all of your savings and then adding up all of your debts to find out whether you have any money that you can call your own to be a deposit.
J_B.

AnnaT_3

We have the deposit sorted - my mum is giving me it (it's actually my money but she's been keeping it since I was little for just such a thing).

I'e discovered (via my credit report) that the amount on the loan is just less than £3,000 left.

I think I should pay that off?

VIGILANT22

I've just seen your other thread, this is shared equity.....do you have an adviser of yr choosing?

AnnaT_3

Not of my choosing. I have to go through the one the house builder recommends. Doesn't work Saturday (lucky him) so haven't had a talk yet. I just want to get everything in order if I can first as we need to move quickly once Monday comes!

AnnaT_3

I have another question (so sorry!). I'm a mum and have not been working for last 3 years. Will this have any effect on mortgage application? I was self employed for the last 2 years (just put second tax return in) and am continuing with that too but want to seriously cut back on self employed business (hence job - and kids older so can work again).