using credit card once mortgage has been completed??

tink_1983

HI, we are in the process of buying new build, we have all the costs covered barr all the new flooring.

The builders will let us 'settle' the account for the floors once the mortgage is complete, just wanting to check..

Once the mortgage has gone through is it okay to wack £2k on one of my cards, might not make my credit score look great i guess, but we'd have it paid off in 4 months.

know i cant do this before completion, but after i presume its fine?

sfax

If you have £2k available on an existing card it really makes no odds when you pay and the effect on your credit score isn't relevant unless you apply for credit with the whole balance outstanding and this gives you a high credit utilisation.

Incidentally you'll be considered high risk for new borrowing just after you move (and I wouldn't even attempt to apply for anything until the CRAs show you on the electorall roll at your new address) so make sure the credit is available before you move

tink_1983

sfax wrote: »

If you have £2k available on an existing card it really makes no odds when you pay and the effect on your credit score isn't relevant unless you apply for credit with the whole balance outstanding and this gives you a high credit utilisation.

Incidentally you'll be considered high risk for new borrowing just after you move (and I wouldn't even attempt to apply for anything until the CRAs show you on the electorall roll at your new address) so make sure the credit is available before you move

thanks for this, yes it will be an existing credit card we will be using, just wanted to confirm this will be okay once mortgage has gone through as know it would be a no no before we complete as lenders are known to do last minute credit checks

cheers

sfax

tink_1983 wrote: »

thanks for this, yes it will be an existing credit card we will be using, just wanted to confirm this will be okay once mortgage has gone through as know it would be a no no before we complete as lenders are known to do last minute credit checks

cheers

The £2k transaction would have to first appear on your statement, and then be sent to the CRA before it was visible to your mortgage lender during a search. I don't think there are further credit searches made after the agreement in principle (assuming the amount required doesn't change)

kloana

sfax wrote: »

I don't think there are further credit searches made after the agreement in principle (assuming the amount required doesn't change)

Further checks can be made any time up until purchase completion - there's a lot of horror stories about of mortgage offers being pulled at the very last minute because the lender has re-checked, in some cases several weeks after the offer was made and supposedly signed, sealed, delivered. It's not that common, but it does happen. In more than one case, the rug has been pulled on the very day the buyers were supposed to complete and collect their keys.

OP, 2k on a CC may not be a big deal, but remember that if your lender re-checked you tomorrow, a 2k credit card debt would knock £60 per month off your assumed affordability (based on the calculations they use, i.e. 3% minimum payment). If your mortgage affordability as per the figures that you reached with your broker are on the tight side, I'd advise against using a CC right now (lender doesn't know that you'll repay in 4 months).

However, if you have a couple of hundred quid, or more, per month to play with after your outgoings (including proposed mortgage) have been factored in, then 2k on a CC is unlikely to make a huge difference. If in doubt, contact your broker, who'll know more about the particular quirks of the lender s/he has placed you with.

tink_1983

kloana wrote: »

Further checks can be made any time up until purchase completion - there's a lot of horror stories about of mortgage offers being pulled at the very last minute because the lender has re-checked, in some cases several weeks after the offer was made and supposedly signed, sealed, delivered. It's not that common, but it does happen. In more than one case, the rug has been pulled on the very day the buyers were supposed to complete and collect their keys.

OP, 2k on a CC may not be a big deal, but remember that if your lender re-checked you tomorrow, a 2k credit card debt would knock £60 per month off your assumed affordability (based on the calculations they use, i.e. 3% minimum payment). If your mortgage affordability as per the figures that you reached with your broker are on the tight side, I'd advise against using a CC right now (lender doesn't know that you'll repay in 4 months).

However, if you have a couple of hundred quid, or more, per month to play with after your outgoings (including proposed mortgage) have been factored in, then 2k on a CC is unlikely to make a huge difference. If in doubt, contact your broker, who'll know more about the particular quirks of the lender s/he has placed you with.

Thanks for this. This is what I thought.

So no cc purchases till the mortgage is complete, all signed & sealed!

I just want to confirm adding money to the cc won't cause problems once the mortgage is complete :-)

sfax

kloana wrote: »

Further checks can be made any time up until purchase completion - there's a lot of horror stories about of mortgage offers being pulled at the very last minute because the lender has re-checked, in some cases several weeks after the offer was made and supposedly signed, sealed, delivered. It's not that common, but it does happen. In more than one case, the rug has been pulled on the very day the buyers were supposed to complete and collect their keys.

OP, 2k on a CC may not be a big deal, but remember that if your lender re-checked you tomorrow, a 2k credit card debt would knock £60 per month off your assumed affordability (based on the calculations they use, i.e. 3% minimum payment). If your mortgage affordability as per the figures that you reached with your broker are on the tight side, I'd advise against using a CC right now (lender doesn't know that you'll repay in 4 months).

However, if you have a couple of hundred quid, or more, per month to play with after your outgoings (including proposed mortgage) have been factored in, then 2k on a CC is unlikely to make a huge difference. If in doubt, contact your broker, who'll know more about the particular quirks of the lender s/he has placed you with.

Interesting. Not sure why they would recheck in practice unless the agreement in principle had expired or the amounts had changed but I concede it could happen so perhaps best to err on the side of caution

tink_1983

Apparently credit checks last 3 months.
So as I'm buying new build.
So if completion is delayed they might re check my credit report apparently.