will getting a new credit card affect my mortgage chances?

wanye

gonna be applying for a mortgage in the next couple of months, i have a decent enough credit score (500+ on equifax) and no bad debts, but i got a letter yesterday saying my amazon credit card is reverting to a standard MBNA one, so there will no longer be any amazon vouchers as a reward for my spending. which was the reason i got the card in the first place.

i was looking at getting a macbook pro on it next month (paying it off in three monthly chunks) but now i'm thinking i may as well just apply for a new 0% on purchases card and buy it on that to save a bit of interest. Obviously i would close down the amazon/mbna card when i got the new one...

...but i'm wondering just how much of a hit my credit rating would take if i got a new credit card so near to applying for a mortgage?

would it balance back out again after being shown the amazon card account is settled? or should i stick with the mbna card until the mortgage stuff is all out of the way?

ta,

w.

The_Boss

You don't have a credit score or credit rating let alone a decent one, as credit scores and ratings do not exist. See the top sticky thread in this forum and my signature for further information.

How many other credit cards do you have? Any other loans etc?

Personally I wouldn't apply for any credit in the year leading up to a mortgage, just in case further credit searches are required as part of your application. Certainly not in the 6 months beforehand.

wanye

ive only got the one card - i used to have two, but closed the other one a year ago.

ive got two loans... a new car PCP loan which has another 2 years to run and a £7k/5yr personal loan which is around halfway paid off. Both of which are always paid on time... otherwise, i never go overdrawn and usually pay my credit card off in full every month (apart from two occurrences in the last year where i paid half off the first month and then the balance left the month after)

i wouldnt have considered getting a new card if it wasnt for the letter yesterday saying its moving to a normal mbna card (which offers me nothing of use) next month... but i'm needing a new macbook soon for work, so was going to buy it when i go on holiday to the US next month as its several hundred pounds cheaper... but as i'm saving for the holiday i cant pay it off until after i get back, hence the 0% on purchases card idea...

The_Boss

Bear in mind that the mortgage lender will probably want all outstanding debt to be paid off as a condition of accepting your application.

mcpitman

The_Boss wrote: »

Bear in mind that the mortgage lender will probably want all outstanding debt to be paid off as a condition of accepting your application.

Not strictly true; as long as the debt is managed well and all payments are up to date you should be fine. Make sure you don't use cash advances on credit cards too.

Don't lie on your applications, upon referring to credit bureau data they will know if, for example you have said you only have £5k debt bit actually have £10k etc.

wanye

ta pitman...

i never get cash on my credit card, and the two loans i have will be paid off in the next couple of years

i might see if my mum can get a new card with 0% on purchases and add me as a second cardholder - i can afford to pay it all back (im currently saving upwards of £500 a month from my wages towards the deposit - which i already have more than 10% so dont need to increase it any more to lower the interest rate on the mortgage when i get it), i just need a couple of months to pay it off, and if i can do it without taking hit on my credit file, all the better!

yagetmeh?

dotdash79

The_Boss wrote: »

Bear in mind that the mortgage lender will probably want all outstanding debt to be paid off as a condition of accepting your application.

Not true, so long that your affordability carries you then they won't ask for that. However carrying any balance on the credit card that will impact on affordability.

Chuck your details in an affordability calculator on mortgage provider and see how it impacts on things.

However 1 or 2 searches shouldn't impact on a mortgage application if you leave it a couple of months.

The_Boss

Hmm, I've had two mortgages where we were accepted subject to proof of paying off debts, so I assumed this was the norm. No other issues on our credit files or with salary. Sorry for the dodgy advice people.

dotdash79

If you used a broker they might have put a tick in the box that says this will be paid on completion.

wanye

update - after having a chat with my mortgage advisor during our meeting last week, i decided against it.

I've now asked my mother to apply for a halifax clarity card (and get one in my name) so i can buy the laptop with 0% foreign transaction fees when i got to the US next month. she is then going to pay it off in full when the bill comes in, and then i'll pay her back in chunks over the next 3 months after i get back from holiday...

I'm going to keep my current card, and then after ive got the mortgage, ill look at swapping it for a better card