Paying off Credit Cards With Equity

toddler9

I am looking for some advice please- we recently had a meeting with our in house mortgage adviser in NatWest. We already have a mortgage with them and are looking to port the mortgage and borrow some additional money for a bigger house.

We have approximately £43,000 equity and were planning on clearing a credit card balance of £7000 upon the sale from this. The lady we spoke to in branch a few weeks ago said this would be fine. However I have just called the NatWest mortgage center and they said this is not fine and the balance needs to be gone before we apply. Does anyone have any experience of this? We are now going to have to ask a family member if they could bridge the gap for us until we release the equity from the sale and pay them back.

kingstreet

It is usually acceptable to say the balance will be cleared "on or before completion" for the commitment to be excluded from affordability calculations.

Usually, the only exception to this is Santander which assumes the debt will be re-drawn soon after, so it includes such commitments in affordability calculations.

toddler9

Thank you for your swift response.

I managed to get hold of some one at the actual bank branch (the new Mortgage adviser) and he said that it would be fine to say they will be cleared with the proceeds.

We are really stretching the affordability however as my husband has only just started a new job after being made redundant in December (he has renovated our house in the interim) and therefore they won't take his salary into consideration as he has not had continuous employment, with the mortgage only mine. And I have to have his car finance under the application also as the existing borrowing we are porting is in both of our names.

If needs must we can get some more money together for the deposit but we were hoping to keep some for immediate renovations (i.e heating!) Also the mortgage adviser in the branch has told me to bring his new contract in when we complete the application as he could push it through if needs be. (he is not in a probation period- has a good job with a big company and prior to redundancy was with the same firm in the financial sector for 10 years)

We are going for a 85% LTV so I am hoping this work in our favour but I am concerned we will be declined at underwriting stage...