Credit cards: should we pay off before applying for mortgage

reallyjammyjam

Hi all

I saw a while back in the weekly email about credit card debt and increasing mortgage affordability.

We've been working our bums off to pay off our credit cards but now I'm wondering if that's the best idea. The email said its best to leave the balance at just below 50% to strike a balance between debt amount and available credit.

I wanted to get other peoples take on this? We are going for a 5% deposit so we really need to increase our chances as much as poss.

R_P_W

Having a credit card debt isn't good....in any way!

Using a credit card and paying off the full balance every month is sensible.

Thrugelmir

reallyjammyjam wrote: »

I wanted to get other peoples take on this? We are going for a 5% deposit so we really need to increase our chances as much as poss.

At a 5% deposit level, any sizable amount of debt may impact affordability criteria. For the simple reason that the deposit will be viewed as borrowed.

dgtazzman

Depends on affordability. Nationwide were ok with us carrying a 2k CC debt (it's on the 0% deal, so wanted to keep it), but we advised them our other CC balances would be cleared before completion, which they were happy with.

dimbo61

If you are looking at a 95% mortgage you should clear all CC debt.
You want to put yourself in the best possible position by making sure you are on the electoral roll, clear any debts and loans you have, make sure you pay every bill on time!
Check your credit report with the 3 companies to make sure there are no nasty surprises.
Build up as big a deposit as possible and DO NOT take out any new credit!
So do not order the sofa from DFS on four years 0% credit

reallyjammyjam

Thanks for all the replies.
I did think it was best to clear all debt (or as much as poss) before applying but the weekly email confused me.
I get it now that it probably does apply if you had a sizable deposit but not otherwise.
We shall keep on making a dent in it!