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Mortgage and credit rating
Judbut
Posts: 10 Forumite
Hi,
My OH and I have been given a mortgage agreement in principle and are looking for a house. My credit card company has offered me a 0% money transfer into a bank account for 12 months. As we are looking to buy a house this would be a cheap way to get money for the little extras we are bound to need for the new house. The only potential problem is that I would then be using 50% of my total credit available and nearly a 95% of the limit on one card. The AIP was for about £100k more than we want, will getting this extra money on my credit card reduce my credit score and impact on the chances of us getting an agreed mortgage?
Many thanks
My OH and I have been given a mortgage agreement in principle and are looking for a house. My credit card company has offered me a 0% money transfer into a bank account for 12 months. As we are looking to buy a house this would be a cheap way to get money for the little extras we are bound to need for the new house. The only potential problem is that I would then be using 50% of my total credit available and nearly a 95% of the limit on one card. The AIP was for about £100k more than we want, will getting this extra money on my credit card reduce my credit score and impact on the chances of us getting an agreed mortgage?
Many thanks
0
Comments
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It shouldn't.
It should only influence affordability. Lenders typically "tax" your income with upto 5% of a credit card balance.
ie £5,000 card balance = £250 per month deducted from income. A lender which offers 5x income is going to reduce your maximum mortgage by £15,000, on that basis.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 -
How much do you currently owe between you in unsecured credit? Also how much more are you looking to draw down.0
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Thanks for the replies.
We currently owe about £13.5k between us, he owes about £11k and I owe around £2.5k. If I got this extra money I would owe £6.5k. Between us we earn £63k, I have a loan as well repayments of £150 a month. Neither of us have any other debt, nor any defaults etc so both have good/excellent credit scores. We are looking for a mortgage max £150k.0 -
Credit score is meaningless.
A lender will score you themselves. Level of debt will be a factor if you are looking for a high LTV. As effectively you've borrowed the deposit. Not a good sign to a potential lender that you manage your money well.0 -
We have the deposit. This would just be extra.0
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