Credit Card advice for mortgage application

surfjockeyuk

Hi, I've just been through the ringer last July trying to get a big mortgage (£300,000+) and I'll pass on what I've learnt. The majority (90%+) of Lenders only use Experian (CreditExpert.com) for references. Credit Card debt can have a dramatic affect on your mortgage application. In my experince it's best to have no cc debt. If you have a valid cc the amount of available credit on your card can be offset by a reduction in your final offer, in my case one card had an available balance of £11,600 and so they made an offer, but reduced it by £10,000. Finally, athough I had paid off my card the lender wouldn't release the funds until Experian showed a nil balance (and that's another story).

Please consider going to an financial intermediary. Santander wouldn't loan us the money through their branch system, because the computer, when stress tested said "no", and yet the Abbey (only available to intermediaries) owned by Santander lent us the money. Everyone says that interest only mortgages aren't available anymore and yet we got a 50/50 split. Good news is we moved in last November. I hope this helps. Ask if you'd like to know more.

JKSandy

I would go with clearing your debt and wait until it shows as cleared on the CRA's before applying for a mortgage.


As above, how much you can borrow can reduce dramatically if you are carrying debt.

skater_kat

Do credit searches show up credit union accounts though? some credit unions are incredibly....basic.

Tixy

skater_kat wrote: »

Do credit searches show up credit union accounts though? some credit unions are incredibly....basic.

Mostly they don't no.

But that won't make any difference to a potential mortgage lender, they'll still know about the debt as the borrower will still have declared it on the mortgage application.

Candyapple

skater_kat wrote: »

Do credit searches show up credit union accounts though? some credit unions are incredibly....basic.

Good question. Although I imagine if OP was applying for a mortgage, regardless of whether the debt shows up on his credit files, the mortgage provider would query what £xx monthly payment was for and the total sum would be reduced from their lending balance offer. So in essence, makes no difference if the debt is showing on the files as cc debt, as it would still count.

Thrugelmir

Candyapple wrote: »

Good question. Although I imagine if OP was applying for a mortgage, regardless of whether the debt shows up on his credit files, the mortgage provider would query what £xx monthly payment was for and the total sum would be reduced from their lending balance offer. So in essence, makes no difference if the debt is showing on the files as cc debt, as it would still count.

The debt should be declared. Failure to do so is lying, i.e. application fraud. Lenders won't waste their time. As what else might the applicant have failed to mention.

brydo86

Thanks for all the help, after applying for a balance transfer I was given 2.8k to be transferred so in the end up I have used the balance transfer and my credit union to clear the card over a 9 month period (which will be tough) but needs must. I will then be debt free and then saving pennies for the deposit. Cest la vie!

andydiysaver

I recommend L&C - I really do - and I'm not a rep - they've fixed me up twice now and it makes sense - do you want someone crawling all over these policies for you or do you want to do it... and even if you are hands on, biggest mistake you can make is thinking your bank has relationship and cares..... wrong.... you are a commodity /asset to your bank and risk managed like all the rest of them, ok you get on with your bank it might work, then again it might not.. and their criteria is for the whole world not just you... so better to tailor where you go based on lenders whos criteria set you come close to. or let someone like L&C or another do it for you. if you choose a broker, be honest, then they find the package that is chucking the money out at people like you at any set point in time....