Some Advice on CC Balance and Mortgage

thegaffer

Good Morning, I wonder if any one can help with my question.

I am currently saving up my deposit for my mortgage. (about 5 months away) anyway I’m on target to get my deposit +.

I have done a soft search application through Nat West online Mortgages putting in a rough figure of the purchase price I would be after and what deposit I would put down, that came back saying they would potentially lend me my money dependent on checks etc (which I totally get)

My question is that I have 1 loan £14 a month and a credit card which will have £2k on it come October when I will apply (I’m sure I can’t be the only person with small debt) and I earn a decent salary will have my deposit etc.
I would guess that having a balance on my CC would lower the amount I’m likely to get, I pay more than the min payment each month (as its interest free until next year when I plan to have it paid off) so the balance is not going up its going down each month.

Will having a balance on my card affect me negatively? I’m guessing it shouldn't as I've never missed a payment on any bill, lived at address for a long time and pay more than my min payments, but I’m just cautious and wondering, the fact the soft search from Nat west was positive leads me to think I’l be OK, but has anyone else had this etc .

I know it’s a trivial question but when you really want a house I’d rather ask then not, and this forum has many different people with past experiences or people in the business who might be able to answer

Thanks for your time

ACG

The balance will reduce your affordability.
How much of an impact that will have depends on the financial details (income, how much you want to borrow etc).

Pre MMR i did see someone (with a different lender) who had £3k on a credit card and it reduced their borrowing capacity by £16k - that was the most extreme i have seen but it gives you an idea of how much impact it could have.

thegaffer

Thanks for the reply

as a guide i'm using the 5% Gov scheme, aiming to put down £11k with a purchase price of 200k so 5% deposit.

Income £35k a year
Partner £19k a year

with the only debt being the £2k on CC and the loan which will have £4 left

ACG

It could be tight you know.

Affordability on HTB is assessed at a higher rate than non help to buy with natwest and a couple of other lenders.

I would check with them before going too far down the line.