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0% CC debt against mortgage offer
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longwalks1
Posts: 3,833 Forumite
Am planning ahead so only asking at the moment. If you owe, for example £4,000 on 2 credit cards at 0% interest (total owed £8k) and pay £100 to each card per month. When applying for a mortgage, would they simply take away the 2 x £100pcm x 12 months from your annual salary, when calculating what you can borrow?
So with the above, if you earned £50k a year, they used:
£50k - £2,400 = £47,600 salary to use as the multiple?
Is that how it works?
So with the above, if you earned £50k a year, they used:
£50k - £2,400 = £47,600 salary to use as the multiple?
Is that how it works?
0
Comments
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1. it depends on the lender how it works
2. it will all change as of 26th AprilI am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, 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.0 -
Lenders tend to deduct 5% of the balance on affordability, so a £8k card debt is treated as £400 per month.
Try different lenders' affordability calculators to gauge the difference. It will be more than simply deducting that from income;-
http://intermediary.natwest.com/tools/calculators/calculator.asp
http://www.halifax-intermediaries.co.uk/tools_and_calculators/mortgage_affordability_calculator/default.aspx
http://www.nationwide-intermediary.co.uk/calculators/aff_calcI 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
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