No obligation to clear credit card balance?

Catherine_Johnson_2

Can someone tell the OP that he need only pay £1 off the credit card bills please and that all will be fine. It's clearly the answer he wants to hear.

kingstreet

freddieD wrote: »

I recently received a mortgage offer, from the Halifax, through a broker that I suspect is a bit dubious. The offer states, in the conditions, that I have agreed to re-pay all or some of the credit card balances I have at the moment but they do not specify an amount. I asked the broker what would be the minimum they expect me to pay or how they will know how much I pay. The broker told me that once I have the money in my account they cannot check if I have paid all or some of the credit cards. He also said that they cannot come and ask for their money back and that I can do whatever I want with the money. Is this true? could it be that the broker wants to convince me to accept the offer, just like that so that he does not lose his generous commission?

Is this a remortgage, for debt consolidation, or are you taking a new mortgage on a new home?

If it's the former, getting a remortgage to consolidate seems a bit daft if you don't actually consolidate.

If the latter, repaying the credit will help you have a better standard of living.

freddieD

ValHaller wrote: »

ooooh! touchy!

Most people here know what consolidation is and how it is supposed to work. Your defensiveness in your response has just made your warning sign a bit bigger. And you do seem to be asking how little you can pay off.

Consolidation can work just fine. But for debt junkies, it just frees up the original credit to have another splurge.

And I notice you have defended rather than giving any idea of how much for any of the things you asked. It's not my money but I am getting a seriously bad vibe.

Luckily, you are not the mortgage company

freddieD

kingstreet wrote: »

Is this a remortgage, for debt consolidation, or are you taking a new mortgage on a new home?

If it's the former, getting a remortgage to consolidate seems a bit daft if you don't actually consolidate.

If the latter, repaying the credit will help you have a better standard of living.

It is a new mortgage on a property that has no mortgage. However we are deviating from my original question. I am trying to elucidate that vague statement about paying some or all of the credit cards, although I sympathise with the fact that some people like to pick on small items of information to talk about something else. I do it sometimes.

ValHaller

freddieD wrote: »

Luckily, you are not the mortgage company

Yes, I think that is luckily for me.

And luckily for your mortgage broker, because I would be taking a fine toothcomb to all his cases from now on.

But fingers crossed while I type, you only need to pay back £1.

kingstreet

freddieD wrote: »

The broker told me that once I have the money in my account they cannot check if I have paid all or some of the credit cards. He also said that they cannot come and ask for their money back and that I can do whatever I want with the money. Is this true?

As you seem to want a specific answer to a specific question, I'll confine myself to that.

The lender can request evidence that you have repaid "all or some of the credit cards."

They can ask for their money back at any time, but would be unlikely to do so, and would be unlikely to receive the support they would need in Court to force you.

Once you have the funds from the solicitor, it is yours to do with as you will.

JimmyTheWig

I'm confused, OP.

First I thought that they wanted you to clear your debts before they would give you the mortgage. I could understand that. I could also understand that you weren't happy/able to do that (and so wanted to keep the repayments to a minimum) if you were planning on using the mortgage to pay the debts. This fits with the idea of consolation.


But re-reading it appears that a condition of the loan is that they _want_ you to use the loan to pay off the debts. Which is what you want to do, isn't it? Isn't that what you say you are doing by consolidating?
Consolidation can work if the interest rate is lower than the current rates you are paying, but only if you are hard on yourself and don't get further into debt.


But you then go on to say...

freddieD wrote: »

I am selling the property so I will pay off all debts, including the mortgage and all credit cards.

Are you saying that actually you want to take out the mortgage and spend most of it and that by selling the house you will pay off your debts and the mortgage?
So what is it that you want to spend the mortgage on?
Are you aware of the fees involved in getting and repaying a mortgage? This is generally a _very_ expensive way of borrowing money in the short term.
Can your purchases not wait until you have sold the house?

freddieD

kingstreet wrote: »

As you seem to want a specific answer to a specific question, I'll confine myself to that.

The lender can request evidence that you have repaid "all or some of the credit cards."

They can ask for their money back at any time, but would be unlikely to do so, and would be unlikely to receive the support they would need in Court to force you.

Once you have the funds from the solicitor, it is yours to do with as you will.

I was not looking for any specific answer but your statements are like those of my broker, except that he is trying to convince me that they will not ask for evidence of the credit cards being re-paid and that the mortgage company will not demand the money back. I agree with the latter, if we have made a contract, and I pay (any) amount of money into my credit cards, where would there be a breach of contract on my part?

kingstreet

I suggest you ask the lender. It is the lender's offer condition, with which you have an issue.

How the rest of us choose to interpret it is a matter of pure speculation.

Thrugelmir

freddieD wrote: »

Consolidation works in this instance as the interest in the mortgage is less than the interest in the credit cards. Besides, I am selling the property so I will pay off all debts, including the mortgage and all credit cards.

How is it a warning sign? I am saying, if they do not specify the amount to pay on the credit cards, is it my fault if I pay £1 into them and then they come back and tell me they are not happy? How long is a piece of string?

Based on the further information you have given. The new lender would appear to be expecting you to clear the majority of your debts from the sale of the property. They accept that there may be a balance left on your cards. As many people use their cards regularly then clear then every month.

Clearing the bulk of what I assume to be a sizable amount of debt is therefore a condition of the mortgage. Should you not so then technically you would be in breach of mortgage terms and conditions. If the lender so wished they could enforce such remedy as allowed by the contract.

Lending is based on trust. Break the trust and you'll have no defence.