Consolidation & Mortgage/Credit rating

wardy555

Hi,

I currently have approx £15k of debt on a mix of overdraft, store cards and credit cards. I would like to consolidate this into a single loan and have been offered one at an average level. I will also be looking to take out a mortgage as a first time buyer towards the end of next year. Will taking the loan out affect my credit rating (any more than currently, bearing in mind my current level of debt) when it comes to applying for my mortgage?

Thanks

You-kip

May I ask who has offered you a 15k loan?

wardy555

I was offered the loan by Halifax

gb12345

wardy555 wrote: »

Hi,

I currently have approx £15k of debt on a mix of overdraft, store cards and credit cards. I would like to consolidate this into a single loan and have been offered one at an average level. I will also be looking to take out a mortgage as a first time buyer towards the end of next year. Will taking the loan out affect my credit rating (any more than currently, bearing in mind my current level of debt) when it comes to applying for my mortgage?

Thanks

That rather depends on whether you get rid of the overdraft facility and close the cards or reduce the balances. For starters your payments to your credit will be included in affordability calculations.

If you don't close them and end up with 30k of unsecured debt then the mortgage lenders are also going to wonder why you have to live on credit.

wardy555

I will pay off all of the debt straight away. I presume it can't make my credit rating any worse?

gb12345

wardy555 wrote: »

I will pay off all of the debt straight away. I presume it can't make my credit rating any worse?

But will you close them or will you end up putting things on them resulting in a loan and another 15k on cards and overdraft?

wardy555

I will make sure that they are closed immediately, I have learnt some good lessons over the past couple of years!

Tixy

It shouldn't harm your ability to get a mortgage in over a year's time (assuming you ensure you can afford the loan and don't miss payments etc).

Whilst the loan will be factored in to affordability calculations mortgage lenders usually seem to prefer a loan with structured repayments to revolving credit.

Thrugelmir

Where's the deposit for the property purchase coming from if you are currently heavily in debt?

gb12345

MaraJadeC wrote: »

Hello, I am new to this. I hope you can elaborate.

Thank you!

I'll elaborate for you, but on a different subject:

1. Would be spammer sets up account.
2. Would be spammer posts random meaningless posts on various threads to build up post count.
3. Spammer finally posts their pathetic spam.
4. Spam is quickly reported and deleted.
5. Pathetic spammer is PPR'd.

You appear to have done steps 1 and 2 - I wouldn't bother with the rest, just save us all some time and crawl off back to your hole.;)