Should I reduce high CC unused limit for mortgage app?

zarf2007

Hi

I'm in the process of applying for a mortgage and have a CC with a £18K limit (4K balance). I am playing this off 250 per month but wondered if it would help to reduce the limit to £10k so that I do not have lots of 'available credit' or would it make things worse as it would then look like I have 40% of the balance used as opposed to less than that if the limit stays on £18K

Just wondered what looks best from the lenders point of view? I have no missed/late payments, ccjs or defaults on any debt and have only another £10K car PCH agreement which ends in sept this year (4 years, no missed or late payments)


Any opinions appreciated!

KTF

The previous times I have applied for a mortgage they ask for outgoings only. Never been asked what the credit limit is on the cards I have.

lawriejones1

You'd be best off keeping the card and paying it off.

My available credit was (and still is) over £30k (but a zero balance). Mortgage company didn't mind.

Thrugelmir

Lenders will more interested in the outstanding balance than the facility.

zarf2007

Thrugelmir wrote: »

Lenders will more interested in the outstanding balance than the facility.

Thanks all for the answers, but would they not view this as risky as I could take the mortgage and then max out the card? (Not that I would!)

Thrugelmir

Nothing to stop you obtaining finance in the future in any event.

Relationships are built to a high degree on trust. With the borrower expected to act responsibly.

YorkshireBoy

Thrugelmir wrote: »

Nothing to stop you obtaining finance in the future in any event.

A new mortgage, and the associated monthly payment showing on a credit report, would limit the OPs ability to assemble large debt elsewhere though?

zarf2007 wrote:

but would they not view this as risky as I could take the mortgage and then max out the card?

The amount loaned (against the property value) will ensure they can re-possess without taking a financial hit!

GDVS

KTF wrote: »

Never been asked what the credit limit is on the cards I have.

Lenders don't need to ask, they get that straight from the CRAs if they're interested.

ValHaller

Thrugelmir wrote: »

.... Relationships are built to a high degree on trust. With the borrower expected to act responsibly.

Agreed. Desirable mortgage borrowers who always pay in full and on time and have very little outstanding credit are in any case more than likely to have huge amounts of credit available if they choose to take it. Savvy lenders will understand this and are looking for people who do not max out their credit potential. They are then forced to trust - but past behaviour indicates that their trust will generally be well placed.

kingstreet

Available unused credit is only a potential issue for YBS Group in my experience. That's Yorkshire itself, Chelsea, Accord and Norwich & Peterborough. No other lender routinely bothers about it, although there may be particular circumstances where they do have a concern. In which case, the applicant may be asked to reduce or close such accounts.