Remortgage - paying off credit card

KingHenryVIII

Hi,

when remortgaging to a new lender if it is agreed that part of the remortgage amount (we are adding to our current mortgage total) will be to pay off a credit card do they take this into account when calculating how much they will lend us? I.e. will they exclude the credit card amount from borrowing calculation?

Thanks,
KH

Dave_Ham

Depends on new lender, some do and some do not..

KingHenryVIII

Thanks, the new lender is Santander, any idea how the calculate borrowing?

Dave_Ham

Yep, they include it whether you are paying it off or not

KingHenryVIII

Do you know if Natwest do also?

Dave_Ham

Seems their affordability model is not as straightforward. They should not include, but they sometimes limit on other factors.

No payday loans with Natwest though..

You may be better suited to just engage a broker and let them do all of the leg work for you. You could be checking incorrectly or there could be something else in your financial makeup that would lead to Santander, Natwest or a n other not liking your case..

Some lenders do not like high credit card/unsecured debt balances or debt to income over certain %'s

Us doing it all day every day, should know what the lender nuances are, provide advice and you get less stress.

Thrugelmir

KingHenryVIII wrote: »

when remortgaging to a new lender if it is agreed that part of the remortgage amount (we are adding to our current mortgage total) will be to pay off a credit card do they take this into account when calculating how much they will lend us? I.e. will they exclude the credit card amount from borrowing calculation?

There's no certainty that you will clear the balance nor that even if you do that you won't run up a balance again in the future.

So the lenders perspective is based on your previous 6 years history. Which is factual and enables them to build a picture of you for their own internal scoring purposes when considering your application.