First Time Buyers - Credit Cards

C_Quinn

Hi All,

This is my first posting on the forums so hello to you all...

Basically, I just have a naive query about mortgages. My girlfriend and I are looking to buy our first property and we have credit cards between us. One of us owes more than the other but I just wondered how much of a difference this would make when applying for a mortgage. What factors will be taken into account? How much we owe? Whether we've missed any payments? (we haven't)

We're both in secure jobs and earn in excess of £20k so we think we'd comfortably meet the criteria otherwise.

Any help or guidance would be most welcome...

All the best

alexjramsay1

Hi

Having credit cards with balances outstanding will more than likely affect how much you are able to borrow, because anything you spend on paying the cards reduces how much you have left to spend on a mortgage!

Positively as you haven't missed any payments having these cards will have given you some track record, although having excessive amounts of borrowing doesn't look so good.

Best thing to do is to see an advisor or lender to get an idea of how it will affect you - it's different with every lender but not necessarily a problem.

Alex

betmunch

alexjramsay1 wrote: »

Hi

Having credit cards with balances outstanding will more than likely affect how much you are able to borrow, because anything you spend on paying the cards reduces how much you have left to spend on a mortgage!

Positively as you haven't missed any payments having these cards will have given you some track record, although having excessive amounts of borrowing doesn't look so good.

Best thing to do is to see an advisor or lender to get an idea of how it will affect you - it's different with every lender but not necessarily a problem.

Alex

exceptionally accurate answer from someone without the Mortgage Advisor disclaimer. Well played fella!

C_Quinn

Thank you Alex, much appreciated

Thrugelmir

Depending upon the LTV you are seeking. The amount you owe may well impact the lenders decision. As it will be viewed that you haven't saved the deposit but borrowed it.

ACG

How much are you both earning (combined or individually)?
How much deposit do you have?
How much are you hoping to purchase for? - if you dont know this we will atleast be able to give you an idea of how much you could potentially borrow.
How much is outstanding on the credit cards or will be by the time you come to apply?

Its difficult to give an answer without knowing any of these.

C_Quinn

ACG wrote: »

How much are you both earning (combined or individually)?
How much deposit do you have?
How much are you hoping to purchase for? - if you dont know this we will atleast be able to give you an idea of how much you could potentially borrow.
How much is outstanding on the credit cards or will be by the time you come to apply?

Its difficult to give an answer without knowing any of these.

Hi ACG,

We earn £45k between us, are in possession of £7,500 for a deposit (but happy and capable of saving anything up to £10k), looking to purchase a property between £100k and £125k, and approximately £7k outstanding on credit cards (£6k for one of us and £1k the other)

Cheers,

Thrugelmir

C_Quinn wrote: »

are in possession of £7,500 for a deposit and approximately £7k outstanding on credit cards (£6k for one of us and £1k the other)

Netted together you have £500 saved.

alexjramsay1

betmunch wrote: »

exceptionally accurate answer from someone without the Mortgage Advisor disclaimer. Well played fella!

Fixed.........!

betmunch

alexjramsay1 wrote: »

Fixed.........!

Oh. I guess that explains it then!!! Hahaha

alexjramsay1

C_Quinn wrote: »

Hi ACG,

We earn £45k between us, are in possession of £7,500 for a deposit (but happy and capable of saving anything up to £10k), looking to purchase a property between £100k and £125k, and approximately £7k outstanding on credit cards (£6k for one of us and £1k the other)

Cheers,

Hi

The credit cards are likely to have little bearing on how much you can borrow given your income, however your deposit will severely limit your options. Lenders will also be far choosier with a small deposit, and you'll pay for more for the money you are borrowing.

An adviser will be able to tell you whether getting on the ladder now is the best thing for you, or whether its best to keep saving before taking that step. Last thing you want is to become trapped in a property because you took the step too soon...

Good luck!