Credit cards and mortgage applications

square_eyed_geek

We're currently looking to fill out a mortgage application after being offered a DIP but I just wondered how you're meant to approach filling in details of credit cards on the application, as the banks and brokers we've seen all have different advice.

We use a credit card to pay for groceries every month, that gets cleared as soon as the bill comes in. The confusion seems to be that some people we've spoken to have suggested this goes down as a credit card balance others suggest that the money on there just gets listed in the appropriate section on the budget planner. For example, if we spent £400 on groceries in a month and it was all on the credit card would it be best to put a £400 credit balance with a £400 repayment or does the £400 belong in the groceries section as it never gets to the point of becoming an outstanding balance?

nicegirl

I had a similar situation. My credit card is never at more than £200 so I just put that down as the balance as I thought that if I put nothing down and then they check, it looks like I lied. Later in the form (online) it asked about my credit card balance and asked how much would be paid off before we got the mortgage and I put £200 - so paid off in full.

We were accepted anyway, no further questions asked.

Ozzuk

I'd just not use your CC for a while and ensure its clear when all checks are done. I explained when doing this that it is paid off monthly in full but they still insisted on any balance cleared up front (mine was a complicated application though).

square_eyed_geek

Thank you, I'll see what I can do! I think by the time the application goes off on Monday it's likely to only be a couple of hundred pounds on there anyway which could be cleared if needs be.

One other thing, the budget planner we were sent to look at by our broker contains a section for savings. At the moment we're saving quite a lot so anything surplus goes into savings. I'm assuming having all spare money falling under the category of 'savings' isn't going to be viewed as a bad thing as while it might look like there's zero free money it's all just being diverted to an (easily accessible) savings account?

marklee

My work can involve a lot of travel - it all goes on a credit card. My employer reimburses me each month and the credit card gets paid in full every month.

Nationwide asked for the 'maximum balance held over the past three months' - even if I paid in full every month, they still wanted to know.

However - they accepted my application without a problem - and just had a condition on the mortgage offer that the credit card was paid off. Forwarded a copy of my most recent CC statement to my conveyancer showing that the previous month's balance was fully paid, and no problems

ReadingTim

Errrr...why don't you read the application form itself?

For example, HSBC's 'How much can I borrow' calculator, asks that question. Hover over the 'current credit card balance box, and the following pops up:

Please tell us the total amount you have outstanding on your cards, including any storecards. If you pay your cards in full each month, please enter zero.

Which seems pretty clear to me. I don't think HSBC are unique in this.

kinger101

Generally, they are only interested in balances which won't be cleared when you draw down the mortgage. But if you're not sure, just phone them.

I think they can tell from your credit file if you pay in full each month anyway.

6feet

we put everything on CC and pay the balance each month. It is never under £2,500 a month charged on it. We had no problem getting our mortgage approved.


It said on the mortgage approval that they expected balance to be cleared as someone else stated up the thread.