Credit Card Debt & Getting A Mortgage

billycoco

Hi

Please could someone give me some advice.

As you can see from my previous posts, my boyfriend and I were planning on buying a house this time last year, but I was worried that we would have a problem as I had a default from 2005.

Since 2005 things have improved greatly for me money wise and I now have quite a bit of savings, 15k and boyfriend 20k. We are hoping to keep adding to this

Anyway, my bf and I decided to rent until my default drops off in June next year. Since we have moved into our rented flat we have got engaged (yay) and are planning our wedding. I have used my credit card to pay the deposits on a few things, totalling £1300, rather than dip into my savings accounts and am paying it off in chunks each month, it should be clear by Xmas at the latest, and after which point I plan to reduce the limit down to something small like £500 to avoid temptation.

My question is, when bf and I go to apply for a Mortgage next year when I am default free, will the fact that I have owed some money on my credit card in the past twelve months hinder our chances? I have never missed any payments on this card (my one and only debt)and pay off the minimum amount by dd and another chunk by card over the phone each month.

Thank you! X

billycoco

bump... because I am impatient ;-)

Thrugelmir

Why not just clear your credit card? Will save you interest.

billycoco

Than you. I know I could but most of savings are tied up in a bod at the moment

poppy_f1

as long as the cards have no balance on them it prob wont matter

i cleared my cards in Feb and applied and was accepted for a mortgage in May

stebiz

billycoco wrote: »

Hi

Please could someone give me some advice.

As you can see from my previous posts, my boyfriend and I were planning on buying a house this time last year, but I was worried that we would have a problem as I had a default from 2005.

Since 2005 things have improved greatly for me money wise and I now have quite a bit of savings, 15k and boyfriend 20k. We are hoping to keep adding to this

Anyway, my bf and I decided to rent until my default drops off in June next year. Since we have moved into our rented flat we have got engaged (yay) and are planning our wedding. I have used my credit card to pay the deposits on a few things, totalling £1300, rather than dip into my savings accounts and am paying it off in chunks each month, it should be clear by Xmas at the latest, and after which point I plan to reduce the limit down to something small like £500 to avoid temptation.

My question is, when bf and I go to apply for a Mortgage next year when I am default free, will the fact that I have owed some money on my credit card in the past twelve months hinder our chances? I have never missed any payments on this card (my one and only debt)and pay off the minimum amount by dd and another chunk by card over the phone each month.

Thank you! X

I would just make one comment. If your new lender sees that you are relying on credit each month, to get by, then the chances are they will deduct the monthly amount when calculating your wages.

If possible pay it off in full each month, showing that you not only can manage your money, but you have enough to pay it off each month.

If your credit card is clear come the mortgage, then hopefully none of this will arise. But it has been heard of for lenders to want to check credit agreements/bank accounts going back 12 months, especially at these hard times.

God Luck

Thrugelmir

billycoco wrote: »

Than you. I know I could but most of savings are tied up in a bod at the moment

Then it suggests that you struugle to manage your money still.

becca0417

I would suggest you pay as much off as you can. I owed 2k on a credit card in Feb, paid off in full and have been accepted for a mortgage (hopefully!)

Fab26

As long as you don't miss any payments, it should be fine. Try to pay up as much as you can, so you avoid paying so much interest too. :j