Just Paid off outstanding Debts - When to Apply for Mortgage (Dip?)

Alarae

I have read over a few mortgage guides, stalked this forum for the past month and also googled my question but I haven't found an answer.

I've just paid off all outstanding debts I had which I kept as they were at 0% while saving elsewhere, with a plan to repay at the end of the interest free period. My partner and I have decided to now look for a property, so I have paid these off early to look more favourable to a lender. They were around £3,500.

We have seen a couple of properties we like and would like to get a DIP in place before we go looking properly so we know exactly what we can afford.

I know that some lenders credit check on the DIP stage and my debts may not show as being fully paid off yet. It there any way to note on the application that the debts have been repaid despite my credit file, or is it a question that only a mortgage advisor/broker can put across to the lender?

We would like to apply with Nationwide if possible as they have decent rates and their affordability calculators will lend a bit extra to what we want, which I'm hoping gives us some wiggle room.

In addition, when it says regular travel costs is this the cost of petrol or is this meant to include car maintenance costs as well? I spend about £110 a month and my partner spends around £60.

In addition, does it make any difference my salary gets paid into a Nationwide account? Admittedly it doesn't stay there long, as I transfer it out to a Tsb account for savings and make payments from there (due to interest accrued before payment in the account). One of the debts is also with Nationwide for £1300.

Absolute last question, would it matter if I still use one of my credit cards for purchasing each month if I then pay off in full? I normally funnel my purchases through mine as it gives me rewards. Would I be better off not using it at all and using my bank account instead? I am prepared to do that.

Sorry for all the questions! As you can see I'm an anxious first time buyer but the people on this forum seem extremely knowledgeable and helpful

kingstreet

Alarae wrote: »

I know that some lenders credit check on the DIP stage and my debts may not show as being fully paid off yet. It there any way to note on the application that the debts have been repaid despite my credit file, or is it a question that only a mortgage advisor/broker can put across to the lender?

Assume it takes three months for the credit system to be fully updated to reflect the repayments. Simply tick the box which says the balance will be fully repaid on or before completion so these do not get entered in affordability. In Nationwide's case, you enter the balance now and the balance to be repaid as the same figure,

We would like to apply with Nationwide if possible as they have decent rates and their affordability calculators will lend a bit extra to what we want, which I'm hoping gives us some wiggle room.

In addition, when it says regular travel costs is this the cost of petrol or is this meant to include car maintenance costs as well? I spend about £110 a month and my partner spends around £60.

Nationwide's calculator uses ONS stats for average expenditure. Only enter a figure for travel if you have a season ticket, or spend more on travel to and from work then you would consider to be the average. Don't ask, as I don't know what that it is...

In addition, does it make any difference my salary gets paid into a Nationwide account? Admittedly it doesn't stay there long, as I transfer it out to a Tsb account for savings and make payments from there (due to interest accrued before payment in the account). One of the debts is also with Nationwide for £1300.

Not much difference, no.

Absolute last question, would it matter if I still use one of my credit cards for purchasing each month if I then pay off in full? I normally funnel my purchases through mine as it gives me rewards. Would I be better off not using it at all and using my bank account instead? I am prepared to do that.

Using it and repaying it in full each month is fine.

Alarae

kingstreet wrote: »

Assume it takes three months for the credit system to be fully updated to reflect the repayments. Simply tick the box which says the balance will be fully repaid on or before completion so these do not get entered in affordability. In Nationwide's case, you enter the balance now and the balance to be repaid as the same figure,


Nationwide's calculator uses ONS stats for average expenditure. Only enter a figure for travel if you have a season ticket, or spend more on travel to and from work then you would consider to be the average. Don't ask, as I don't know what that it is...


Not much difference, no.


Using it and repaying it in full each month is fine.

Thank you so much Kingstreet! Even though I work in the Property sector I was a bit lost with having to do my own mortgage!

Thrugelmir

Alarae wrote: »

We would like to apply with Nationwide if possible as they have decent rates and their affordability calculators will lend a bit extra to what we want, which I'm hoping gives us some wiggle room.

NW does look more favourably on those that use the Save to Buy scheme.

amnblog

Kingstreet has just demonstrated what the purchase process is like for a buyer if you have an experienced and knowledgeable mortgage broker working with you.