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Effect of Credit Card Balance on possible mortgage app
Robshelf
Posts: 15 Forumite
Evening all,
I'm hoping to move forward with buying my own house in a month or so once a couple of things settle down.
With that in mind I'm trying not to do anything to adversly impact any potential motgage application, which leads me to the reason for this thread.
I'm due to pick up a new car in the next couple of days and will have to put own the remainder of my deposit(I realise car credit isn't the best idea with regards to mortgages but it is being offset by additional income in the form of car allowance) My question is that since Credit Card balances now form part of my credit file is a sudden 4k spike in the balance of my credit card likely to be seen as a bad thing?
It's paid off in full each month so interest isnt an issue and I may aswell get the cashback and an extra months interest on it as not.
I've actually ended up rambling on a fair bit for what is a simple question but I've been lurking long enough to know most threads inevitably end up with requests for further info.
Thanks
I'm hoping to move forward with buying my own house in a month or so once a couple of things settle down.
With that in mind I'm trying not to do anything to adversly impact any potential motgage application, which leads me to the reason for this thread.
I'm due to pick up a new car in the next couple of days and will have to put own the remainder of my deposit(I realise car credit isn't the best idea with regards to mortgages but it is being offset by additional income in the form of car allowance) My question is that since Credit Card balances now form part of my credit file is a sudden 4k spike in the balance of my credit card likely to be seen as a bad thing?
It's paid off in full each month so interest isnt an issue and I may aswell get the cashback and an extra months interest on it as not.
I've actually ended up rambling on a fair bit for what is a simple question but I've been lurking long enough to know most threads inevitably end up with requests for further info.
Thanks
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Comments
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No harm in using a credit card to pay bills. If you intend repaying in full then no impact at all.0
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Put the full balance on the mortgage application and tick the "to be repaid on or before completion" box and it will be ignored.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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kingstreet wrote: »Put the full balance on the mortgage application and tick the "to be repaid on or before completion" box and it will be ignored.
With most lenders, but some now (such as Abbey) now assume that commitments will not be repaid and so still take 3-5% of balance as a monthly commitment.I am a mortgage adviser.You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Yes, I always forget their practice of taxing you even if you pay it off.
How do they calculate the credit card balance they will use, if it's paid-off in full every month?
The OP is only using it for a one-off. It seems a bit harsh to hit him for 5% of £4k when that is only for a particular purchase and it hasn't been the average balance for a number of months.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
kingstreet wrote: »Yes, I always forget their practice of taxing you even if you pay it off.
How do they calculate the credit card balance they will use, if it's paid-off in full every month?
The OP is only using it for a one-off. It seems a bit harsh to hit him for 5% of £4k when that is only for a particular purchase and it hasn't been the average balance for a number of months.
yes ridiculous system, but I suppose they feel they have to due to the number of "fraudulent" applications here applicants claim they are repaying to get through affordability but then never do.
I assume they will just take the balance showing on the credit check on the day it is done.I am a mortgage adviser.You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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