Is there any chance mortgage lenders will accept my stoozing?

alexanderalexander

I currently have £25k of debt across four credit cards, all of which is stoozed. I am also some way to saving a deposit to buy a flat on top of that and will be starting to apply for mortgages in a couple of months' time.

My question is simple: is there any way I might be able to persuade mortgage lenders to understand that this credit card balance is not real debt, and hence ignore it when they assess my creditworthiness? If not, the only other option I presume is to pay off and cancel all my cards, but I am loath to do that as the balance transfer cards have about 16 months left on them so that would effectively make the balance transfer fees money down the drain and I would have lost my stoozepot.

(And yes, I know this is something I should have thought about before starting stoozing, but the reality is that my circumstances have changed somewhat from when I started stoozing, as then I was not expecting to be in a position to buy a flat for a good two or three years).

kingstreet

No. Normally 3% of a credit card balance will be deducted from your income, like a loan repayment.

So a £30k salary would normally give you a maximum mortgage of around £120k.

£25k x 3% is £750 a month or £9k deducted from your income. That theoretical £120k maximum therefore falls to £84k.

kingstreet

I've just tried the Halifax affordability calculator.

Without credit card balances, maximum loan for a £30k salary is £150k over 25 years.

With £25k credit card balance, this drops to £55,205. Worse than I anticipated above.

somethingcorporate

kingstreet wrote: »

I've just tried the Halifax affordability calculator.

Without credit card balances, maximum loan for a £30k salary is £150k over 25 years.

With £25k credit card balance, this drops to £55,205. Worse than I anticipated above.

:eek::eek::eek:

danthemoneysavingman

I would suggest that if you are stoozing the balances then you will have 25K of savings balance elsewhere, which i would think will be taken into consideration unless you're trying to say that's your deposit...

then again, i'm no mortgage adviser. is savings balance not taken into consideration kingstreet?

2sides2everystory

I persuaded my lender 8 years ago that I knew what I was doing and got a very useful offset base rate tracker out of it at the time ... wouldn't fancy my chances however in the current climate where credit card stoozing is a hard slog and to be honest a bit of a minefield compared to the early noughties. It is much easier in 2012 to stooze sub 1.5% base-rate tracker borrowings - I can tell you that much !

kingstreet

danthemoneysavingman wrote: »

is savings balance not taken into consideration kingstreet?

No. Not even a place to enter it on a mortgage application.

Thrugelmir

danthemoneysavingman wrote: »

I would suggest that if you are stoozing the balances then you will have 25K of savings balance elsewhere, which i would think will be taken into consideration unless you're trying to say that's your deposit...

That's certainly what the lender may well look at.

alexanderalexander

Thank you for the information everyone - it looks like I'll have to hand back that lovely stoozepot and cancel my cards if I want a mortgage – which is a shame, particularly as I will be wanting to build up a new stoozepot immediately afterwards to stooze against my mortgage.

2sides2everystory wrote: »

I persuaded my lender 8 years ago that I knew what I was doing and got a very useful offset base rate tracker out of it at the time ... wouldn't fancy my chances however in the current climate where credit card stoozing is a hard slog and to be honest a bit of a minefield compared to the early noughties. It is much easier in 2012 to stooze sub 1.5% base-rate tracker borrowings - I can tell you that much !

Interesting to hear that – I agree that it would probably be a bit harder to do in the current lending climate though. Also I am looking at 95% mortgages which would be a tough shout at the best of times.

DVardysShadow

danthemoneysavingman wrote: »

is savings balance not taken into consideration kingstreet?

kingstreet wrote: »

No. Not even a place to enter it on a mortgage application.

This is fairly natural. It is assumed that the savings will go towards equity. Savings don't particularly assist with the mortgage itself. Although I suppose you could claim the interest as income, the only other thing you could do with savings is pay off capital. But then why borrow it in the first place.

DVardysShadow

kingstreet wrote: »

I've just tried the Halifax affordability calculator.

Without credit card balances, maximum loan for a £30k salary is £150k over 25 years.

With £25k credit card balance, this drops to £55,205. Worse than I anticipated above.

Which goes to show that it really is crazy to have credit card debt while you have savings if you want a mortgage