Applying for remortgage - how to impress?!

CiderDrinker87

Hi,

I moved in with my partner in December, and we are looking to remortgage the house in a couple of months' time. He currently has a mortgage on the house with his ex-girlfriend; they split up almost 3 years ago but he couldn't afford to remortgage on his own with just his salary. We've established that we need her permission/signature/etc in order to do this, so we're bracing ourselves for potential difficulties and expenses!

However, my main concern is that I have a couple of credit cards and an overdraft, and I'm not sure if it would be better to pay off larger amounts on my credit cards or to keep the extra cash in my bank so that it counts against my overdraft. I'm desperate to do my very best to impress the mortgage people when we come to apply!!!
Any advice would be very gratefully received!!!

Thanks

Thrugelmir

Convert the overdraft into an affordable loan. Your lender should be agreeable to the proposal on the basis that the overdraft facility is concurrently removed. Then map out a plan to tackle your credit card debt.

The above will put you on the right track. How much do you owe? As this will be the determining factor in what the impact will be on your mortgage application. Perhaps now is a good time to review all your outgoings and reduce them accordingly for a while. To give yourself a jump start.

CiderDrinker87

I have 3 credit cards - one with around £850, one with around £1350 and one with around £520. My overdraft facility is £1750, but as it's just after payday I'm only about £200 into it.

The annoying/confusing thing is that I would be able to clear most of the credit cards if not all by the time we're aiming to apply to remortgage the house, I just don't know whether the mortgage people would look more favourably on me paying them all off but having a lesser amount in my debit account, or if they'd prefer to have more in my debit account and for me to just make minimum payments on my cards in the meantime.

It's so hard trying to guess what they want!

Thanks for the above advice

Thrugelmir

Using algorithms the major lenders can assess your credit historical data in a variety of ways. These include minimum payments, whether outstanding debt is increasing or decreasing, number of times your overdraft was accessed. Combined with this the debt you owe will be factored into any affordability calculation.

Lenders are appraising you as a risk and your attitude to the management of your personal affairs. People ultimately fall into a number of fairly well defined groups.

dimbo61

" how to impress?! "
Best shoes and posh frock :-)

itzmee

CiderDrinker87 wrote: »

My overdraft facility is £1750, but as it's just after payday I'm only about £200 into it.

Are you saying that you are already into your overdraft just after being paid? Lenders will want to see that you can handle your finances and if you are going immediately into overdraft after being paid this could go against you.