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How long to wait to apply for mortgage after clearing £40k debt?

howstupid · 2014-11-08 18:27:03

We are currently renting and due to various circumstances I will be able to clear £40k on a myriad of loans and credit cards and still have a £50k deposit in the next week. Husband and I earn £90k between us plus £10 to £15k bonus. I plan to close all but 2 of my credit cards accounts and reduce the limits on those. No…

Comments

kingstreet Posts: 39,464 Forumite

10 November 2014 at 9:35AM

neneromanova wrote: »

When I bought a house with a previous partner, we just had to show that the debts were going to be cleared when the mortgage came through. They were happy with that.

Which is fine if;-

1. You don't have too much credit at the outset
and
2. You pick a lender willing to accept it will be repaid.

There are lenders who will have a look at how much credit you have and decline you even if you intend to repay it and lenders who will still deduct the cost of existing credit from affordability if it's been used in the last three months.

The OP is actually taking the kind of care which is needed in the current post-MMR climate, a "just in case" approach which should mean there won't be any nasty surprises later, regardless of the lender used.

I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
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