Mortgage application

luckless66

Hi,

Not sure if this belongs in here or the credit file forum but essentially I’m looking to apply for a mortgage. I’ve already received a quote from Halifax based on the details I’ve given them but one thing came up that I’d like some advice on.

I currently have a cashback credit card that I use for most day-to-day expenses and that I pay off, in full, every month. As part of the initial checks, the agent asked if I have any outstanding credit commitments. I explained how I use this card and they asked again if I did (didn’t really give me any advice) – so I said no. (I have other cards with 0 balance and an overdraft which I dip into very occasionally for only a couple of days at a time and by no more than about £50)

By saying no, is this correct or incorrect? It’s not really a debt or a commitment as I repay it on a monthly basis and it doesn’t accrue. The same goes for my overdraft. I assume it must be fine as I passed this initial credit check? However, there’s the obviously more indepth application to come up.

At the moment, I’m not going to be taking out a mortgage for a few months, just wanted an indication of how much lenders would be willing to lend me. This gives me the opportunity to refactor my spending habits if I need to.

Any advice?

Thanks in advance.

leccyblue

We had the same issue with First Direct. Like you I explained to the original advisor, but told her we had nothing outstanding.

When it came to the full application, under the credit commitments section we just put the outstanding balance of £200 (as it was at the time of filling the form in) and under monthly repayment put £0 - then just put a note at the side of this to say it was paid off each month.

I wouldn't put £0 as the balance (unless it is!) as when they credit check you they will see an outstanding balance on your credit file.

This way you are declaring the card, the balance as it stands on the day of application - but adding a note to explain how the card is used. Don't put a number other than £0 in the 'monthly repayment' column, otherwise this will be deducted in the affordability checks.

It wasn't queried and we now have our mortgage offer in place.

Hope this helps!

luckless66

Thanks, makes perfect sense to me!