Do you have to pay off credit cards before appying for mortgage?

goldmask

My wife and I are preparing to apply for a mortgage soon. We have 4 credit cards with a balance of £11800 (total limit is 16300). These are all 0% purchase cards, and we have enough cash in saving accounts to pay the card debts and 25% deposit for the mortgage. However, two of the 0% purchase card deals will end later this year (September and December). Can we persuade the mortgage lenders to allow us paying the cards off at the end of the 0% deal? Or will it be better to pay everything off before application? What are the common strategy to deal with credit card debts before mortgage application? Any advices will be greatly appreciated.

Svenena

It might be worth asking this on the mortgages & endowments board - there are several mortgage advisors on there who should know the answer.

goldmask

Svenena wrote: »

It might be worth asking this on the mortgages & endowments board - there are several mortgage advisors on there who should know the answer.

will go to the right board

tigerlily44

goldmask wrote: »

My wife and I are preparing to apply for a mortgage soon. We have 4 credit cards with a balance of £11800 (total limit is 16300). These are all 0% purchase cards, and we have enough cash in saving accounts to pay the card debts and 25% deposit for the mortgage. However, two of the 0% purchase card deals will end later this year (September and December). Can we persuade the mortgage lenders to allow us paying the cards off at the end of the 0% deal? Or will it be better to pay everything off before application? What are the common strategy to deal with credit card debts before mortgage application? Any advices will be greatly appreciated.

I'm not sure about credit card debts but when we bought our house in October last year with 85% LTV they wanted us to pay off the loan for my car before they would grant it. This was for £4000 approximately. We had no other debts and our savings was the deposit. I believe this would be their assessment of our commitments outweighing the one loan that we did have.
I think to get a better deal its better to have no other outstanding borrowing as your mortgage should be the main debt that you have.

hth

tiger

Malky

Current debts will affect how much you can borrow. Mortgage lenders will weigh up your current commitments before deciding how much they will lend to you.