Mortgages and Credit Cards

guruchelles

Hi There,

We're trying to get our ducks in a row to apply for a mortgage and I just wondered if anyone could tell me what the ideal scenario regarding credit cards is.

I'm working on the basis that the less outstanding credit card debt, the better as we'll be able to borrow more money on a mortgage, but if we were to clear the credit cards and then have, say, £25k of available credit spread across the empty cards, would that look dodgy to a lender?

Thanks.

Dave_the_Ginger_Cat

It depends on relative figures. If you earn £200k then no. If you earn £12k, probably yes! If you really don't need £25k of unsecured credit, I'd be inclined to keep the card(s) you prefer and close the rest

guruchelles

Thanks. My husband earns about £50k. How much available credit do you think would be right for that income?

I think it's a good idea to close one or two cards, but currently keeping them open for 0%apr juggling.

Abu-Dina

guruchelles wrote: »

...., but if we were to clear the credit cards and then have, say, £25k of available credit spread across the empty cards, would that look dodgy to a lender?

Thanks.

Lenders don't tell you how their scoring algorithms work. Some may score it postively, other may not. But the general rules are:

1) pay off your credit cards before applying for a mortgage (if you can) - this should help you with your afordibility score.

2) Don't keep too many 0 balance credit accounts open for too long.

Good luck!

Thrugelmir

guruchelles wrote: »

Thanks. My husband earns about £50k. How much available credit do you think would be right for that income?

Close the accounts you have no need of. Far easier way of looking at the situation.