promising to pay off credit card debt before completion?

cressey1984

We have a new build reserved, and our mortgage application has just been sent off to TSB by the broker. On our meeting with the broker the conversation was that we would have to pay off our credit cards out of our own pocket, and we were fine with that as we will be living with my parents for the next 4 months.

However, the estimated completion date at that point was mid September. Today we went down to the Barratts office to make our choices on extras and was told it might even be completed by August.

The problem is we were already going to be cutting it fine paying off the cards by mid september.

So, what happens if we still have some money on our credit cards on completion?

Contemptuous

Have you had your mortgage offer yet? If so, you'll need to check with your solicitor whether or not it is a condition of the offer that the debts are repaid on completion. If it is, then your solicitor won't be able to use the mortgage funds to complete unless the credit cards are cleared in full.

cressey1984

No offer yet, waiting to hear about the valuation being booked in.

Very worrying, we have to save up our stamp duty on our own as well as we only have enough equity to cover the deposit and estate agents fees really. I might speak to the broker again about what we should do if we complete earlier than expected.

amnblog

If clearance of the cards is necessary for you to meet affordability the broker marks them to be cleared.

The offer will then be issued with conditions for the cards to be repaid.

It is left to the solicitors to make sure this happens.

Solicitors' attitude to this (depending on your solicitors) varies between just pointing the conditions out to the borrower to insisting they see proof of clearance.

If you don't need to clear them to meet affordability the broker can advise the Lender.

oli_ro

Depending on the solicitor, you could have problems exchanging, never mind completion.

If one of the condition of the mortgage(mentioned in the offer) is to clear the CC, the solicitor *has* to make sure it is satisfied before exchange.

My solicitor asked for proof on the day of the exchange. My lender is Nationwide.

amnblog

Your solicitor is one of the more pedantic ones.

oli_ro

Ha, ha ... tell me about it.

That is why I said "depending on the solicitor". In my opinion, the OP needs to have plan, though, there is no guarantee this will not be requested by their solicitor as well.

Westminster

When I first got my offer back in September, it included a clause to clear the card balances within 30 days of completion.

I imagine this is a hard one to enforce!

Fortunately (or otherwise) that sale fell though and we are now due to complete on a new (much better) place next month. The offer on this new place has the same clause but due to the extra time, we have pretty much been able to clear the balances anyway.

amnblog

Why do you need the clause? Surely you paid them all off last year?