Debts repay on or before completion?

LeeWillRockYou

I have just received my mortgage offer and I am confused about one part in particular. I am going to call up tomorrow and ask the lender but just so I can sleep easy tonight without stressing I hope someone could clear up this bit:

"Debts you will repay on or before completion of this mortgage...

This offer is issued on the understanding that the following commitments will be repaid on or before completion of this loan:-
Credit Card with Very with an approximate balance of £909.
While these debts may be repaid from the proceeds of this loan, they may not be transferred to any other lender. Your ability to afford this loan has been assessed on this basis".

Do I have to repay that before I can take up to the mortgage? I don't understand, as I pay it off monthly and have never missed a payment and never planned on doing so, I even pay off more then the minimum.

My problem with this is that it was never mentioned to us until now. It wouldn't have been a problem if I had known in advance!

Any help much appreciated as I feel I have exhausted my googling skills trying to find an answer! Thank you!

densol_2

It means you MUST pay off that credit card in TOTAL ( ie £909 ) either before or on completion. You mustn't transfer it to another card either

Thrugelmir

The lender could seek confirmation that the debt is repaid through the conveyancing solicitor.

LeeWillRockYou

Is there a difference between a credit card and a very account?

I really wish this was made clear before and not a few weeks before completion. I can't really afford to pay up £909 odd pound, we had budgeted (along with my mortgage broker/advisor) what we COULD and NEEDED to pay and he never mentioned this nor did he mention the months in advance mortgage payment. Again, it wouldn't have been a problem if mentioned earlier.

First time buyers beware of these types of things, they may not be explained to you.

zarf2007

LeeWillRockYou wrote: »

Is there a difference between a credit card and a very account?

I really wish this was made clear before and not a few weeks before completion. I can't really afford to pay up £909 odd pound, we had budgeted (along with my mortgage broker/advisor) what we COULD and NEEDED to pay and he never mentioned this nor did he mention the months in advance mortgage payment. Again, it wouldn't have been a problem if mentioned earlier.

First time buyers beware of these types of things, they may not be explained to you.

while they could check that this has been repaid the reality is few lenders actually bother....i wouldnt sweat it, you will be into them for a whole lot more so they wont pursue it.

LeeWillRockYou

Whilst I appreciate your advice and it may be (hopefully) true, I'm not sure I'm willing to risk my mortgage application on it

kingstreet

Someone filled in the application and stated the debt would be paid off.

Are you close to the maximum you can afford, as a card debt of £900 will see affordability charged £45 a month and perhaps £2,500 added to, or deducted from your borrowing power?

Someone failed to explain accrued interest and payments being made in advance.

Who was this someone?

LeeWillRockYou

We used a mortgage broker. When applying for the mortgage itself, he asked for utility bills n such, for identification. Being a first time buyer, the only one I had, was a Very statement I printed off the internet. As I passed it to him, he casually asked "Are you going to pay this?" I replied "Yeah, of course". I assumed he meant, keep up with the payments, as in, are you are someone who would repay any debts (such as a mortgage). And that was that.

I don't really understand this paragraph "Are you close to the maximum you can afford, as a card debt of £900 will see affordability charged £45 a month and perhaps £2,500 added to, or deducted from your borrowing power?"

Sorry, as I mentioned, I'm a first time buyer and we passed with flying colours on our credit check, everything seemed to be going so smoothly and now this has happened.

Dave_Ham

zarf2007 wrote: »

while they could check that this has been repaid the reality is few lenders actually bother....i wouldnt sweat it, you will be into them for a whole lot more so they wont pursue it.

For others reading, this is factually incorrect.

kingstreet

LeeWillRockYou wrote: »

I don't really understand this paragraph "Are you close to the maximum you can afford, as a card debt of £900 will see affordability charged £45 a month and perhaps £2,500 added to, or deducted from your borrowing power?

A lender works out what you can borrow based on your income and outgoings.

If you have an outgoing of £45 per month, which is what I'd expect a lender to calculate for a £900 balance on a card etc, that £45 a month is money you can't pay towards a mortgage, so the amount you can borrow is therefore reduced.

So, the question is, are you close to the maximum you can borrow, so this debt has to be repaid, or could you afford it and the mortgage based on the lender's affordability calculator output?

If the mortgage is still considered affordable, you can ask your advisor to go back in the case and take the "to be repaid" of it, it'll be taken into account as an outgoing, but it won't affect the amount of your offer.

If you're in doubt, you should be having this out with the person getting paid to do the job!

LeeWillRockYou

Thanks for making it clearer! You've been a lot more helpful than more broker so far (who I will add is a family friend of all things!)

Seeing as it's a Very account, and £600 of which is Buy Now Pay Later, the rest (£209) which is subject to a minimum monthly repayment I can pay off today in total, if I have to. Do you think that will be more favourable to my lender, when I contact them as do as you suggest?

Really appreciate your help!

Oh, the person I paid to be doing this, is currently on a 3 week holiday, and din't let us know, we found of through one of his colleagues