Mortgage offer received but there is a clause....

sezzybell

As the title suggests, i have received my mortgage offer from Woolwich and the last bit states that i should pay off my credit card balance within 30 days of completion of £5k. This is now £2.5k as i paid a chunk off before i applied. What does this mean? I have a bit put by for furniture etc, will i now have to use this to clear my card instead? Any advice would be gratefully received!

anselld

Sounds like you will need to clear the card, yes.
However they cant stop you spending again on that card or on a different card, so clear the card and then buy furniture on card.

go_cat

It means within 30 days of completion they expect your credit card to be
Paid off..sorry!

We're you by any chance at the top of your affordability ?

missile

Strange, never heard of that condition before.

I would suggest it would not stop you applying for another card and doing a balance transfer if you do not have the funds to clear your other card.

littlesparkles

I had a similar condition from Nationwide recently. I have to have a credit card balance of zero at the date of completion. I only had £100 (yes one hundred) on it so I did think it was a petty clause!!! I have been warned by people on these forums not to use any other credit until I have completed.

_Andy_

sezzybell wrote: »

i should pay off my credit card balance within 30 days of completion of £5k.

.

What does this mean?

erm, it means you need to pay off your credit balance within 30 days of completion of £5k - what else did you think it would mean?

sezzybell

Ok, maybe i should have said - my broker did not mention to me that this would have to be cleared so i didnt think it would have to be until i received this letter. Thanks for the advise those of you who were nice enough NOT to leave a sarcastic message, ill speak to my broker and find out why i wasnt told before! :-)

kloana

sezzybell wrote: »

Ok, maybe i should have said - my broker did not mention to me that this would have to be cleared so i didnt think it would have to be until i received this letter. Thanks for the advise those of you who were nice enough NOT to leave a sarcastic message, ill speak to my broker and find out why i wasnt told before! :-)

The broker isn't lending you the money. He/she is taking you through application, using their knowledge of who may/may not be most likely to accept you, but won't have any say over the specific offer that you're given by the lender. Broker may have noticed that affordability is marginal, but couldn't have necessarily predicted that you'd be specifically required to pay off your CC upon completion.

The lender's obvious concern is how your commitment to CC minimum payments - which would be quite sizeable on your former £5k balance - would impact upon your ability to also pay your mortgage.

kingstreet

It's not beyond the realms of possibility the broker has ticked the box to say the commitment would be repaid at completion.

The lender may also have decided it wanted the commitment repaid as it underwrote the case.

Raise it with the broker and see if it needs to be re-offered.

littlesparkles

I had no mention of the repaying clause until I saw the mortgage offer. In my case it can't possibly have been about affordability. Our income is more than enough for the mortgage amount and house values. It's 80% LTV. We both have stable employment and no debt at all apart from current mortgage which will be paid off. The credit card is simply for online shopping. And only had around £100 on it. I opened a Nationwide bank account as part of the mortgage process and was offered a HUGE overdraft facility and a credit card with a HUGE limit. I asked for lower limits for both. It shows they had no problems with my credit rating!

So it's pretty silly that they stipulated that I must pay off £100 on the credit card. Or it could be because that card is with another bank.....

sezzybell

Thanks all, I'll speak to thR broker and if need be pay it off with my savings and start again....no big deal in the grand scheme of things, I was just curious to know the reasoning etc. I could have borrowed more and have an excellent credit rating. I got the offer and that's the main thing!! :-)