Remortgage - will outstanding credit card balances affect?

blondie1984

I have a mortgage with Nat West and am currently in the process of securing a further advance against the property. The further advance will take the LTV of the mortgage to 75%, and will be used to part fund a deposit on a BTL property I am purchasing. I need the funds for completion on the BTL purchase in July.

My existing mortgage rate with Nat West (BR+2.49%) expires at the end of October, following which the interest rate will revert to Nat West's SVR (currently 4%). I am thinking of either re-negotiating a deal with Nat West, or moving the whole mortgage elsewhere (and paying the Early Repayment Charge on the Further Advance).

In the meantime, I had planned to take advantage of some 0% balance transfer offers prior to remortgaging, in order to pay for some of the legal fees and improvement works on the new BTL property (by transferring the balances to my Egg Money account and withdrawing the cash). I was planning to raise up to £20k this way. However, will this have a negative impact on my ability to re-mortgage my residential property, either with Nat West or a new lender?

Any advice would be greatly appreciated.

robd831

All I can say is a few years ago when we remortgaged I didn't mention my OH had two store cards. However the mortgage company found them on the credit search (with balances) and did take them into account when they did the calculations n affordabilty.
Although yours may be zero or low interest they are likely to see them as an outgoing and use them in calculations....

Leon_W

Even though they are 0% cards, lenders will assume a monthly payment of between 3% and 5% of the outstanding balance. This they will multiply by 12 and deduct from your income. So therefore even a relatively small balance can have a large affect on affordability.

blondie1984

Thanks both for the advice - I may pay the SVR rate for a couple of months and wait until I can pay down the c/card balances before applying to re-mortgage.