Mortgage condition re: credit card

littlesparkles

I got my mortgage offer through today (Nationwide). It has a clause saying the mortgage offer is made subject to a credit card of approx £100 being paid off before or at completion.

This is a credit card with a limit of £1000 that I use only for online shopping and making hotel bookings. It is almost always paid off in full every month and has only a few hundred pounds on it each month. I have no other debts apart from a student loan. This seems a bit picky!! Anyway my question is... Does this mean I have to have a zero balance on the day of completion or that I have to close the credit card account??

For info I have opened a Nationwide current account as part of the mortgage deal and have also taken a credit card with this account.

Polly05

I assume it means it has to be paid, not closed.

Jimbo1976

I'm surprised Nationwide is worried about £100 of credit card debt but if it says it needs to be paid off then then you need to pay it off rather than closing the account down. So ensure you have a zero balance on completion. As this is part of the offer, your solicitor will probably want confirmation.

If you did decide to close the account down then there is nothing to stop you from opening another credit card account after completion.

Senior_Paper_Monitor

Absolutely standard phrase with Nationwide - appears on every Nationwide offer (or perhaps every offer where a credit card at any level has been declared).

Unless your application undertook to pay off credit cards there is no need to take any action (and yest, I have checked that with Nationwide when we became of this issue) - and certainly not in the circumstances that you describe.

It is a theoretical instruction to pay it off, you may choose to pay it to zero and keep a copy of statement - there is nothing in the theoretical instruction not to use it again (even immediately).

Penelopa.Pitstop

There's no such clause in my mortgage offer and I have a few credit cards I use and pay them off in full every month.

Jimbo1976

Penelopa.Pitstop wrote: »

There's no such clause in my mortgage offer and I have a few credit cards I use and pay them off in full every month.

Presumably if you pay them off each month then you did not put them on the application form?

Senior_Paper_Monitor

We always declare clients cards with the current/typical usage balance on them ('to be paid off' if they are paid monthly) - this prevents anyone questioning undeclared cards (with a transient balance - which if csan be considerable), which can 'sour the view' of an application.

littlesparkles

My application was completed over the phone and I probably did mention the card. Never mind, not a problem. I just wasn't sure if it had to be zero or closed.

This also got me thinking... Does now taking out a car loan affect he mortgage offer at all? Does this count as a change in financial circumstances?

Senior_Paper_Monitor

YES - Do not do it until after you have completed !

A late (second) credit cheque is by no means unusual - a car load affects affordability directly - and they don't like 'extra credit' after application full stop.

Penelopa.Pitstop

Jimbo1976 wrote: »

Presumably if you pay them off each month then you did not put them on the application form?

No I didn't because application only mention debts and excludes anything that's going to be paid off in next 6 months. I applied in branch and advisor could see my credit history. Nationwide didn't check my history again after application.

Anyway I don't treat card balances as debt since I use them, pay them off and use again. But if the OP had only £100 on card it's strange that they bother with it unless they understood that she's paying off debt on card by paying £100 every month?

littlesparkles

I will try and put the car purchase off but we do need a second car due to the move. If I do have to get the new car before the mortgage goes through, would it be best to contact Naionwide first to check? Would it mean a whole new application? A check? Affordability wise I can't see it being a problem.