Clearing Credit Card Debt on or Before Completion

Fantasticfool

Hi All,

I am currently buying a new build as a FTB with HTB scheme. At the time of application I had around £15K of CC debt that I advised the broker I would clear before the completion. I subsequently cleared the majority and have been a COMPLETE fool by racking up £12K of gambling debt on a card last night.

I obviously cannot get a loan to repay this prior to completion due to adverse credit file implications ! I am going to juggle my cards so that the balance is on a 0% interest but I am very worried I could lose my mortgage offer and house deposit !

Please can you offer some advice ?

kingstreet

Is there any chance your mortgage would remain affordable with £12k of card debt?

You need to speak to your broker ASAP. Do not keep this to yourself.

Fantasticfool

Thanks for your reply - I don't think it would affect the affordability to the point that it would mean we couldn't afford the mortgage as we were well within the limits.

We are borrowing £205,000 with a disposable income of £2,000 approx. I plan of talking to my mortgage advisor first thing on Monday morning about this as I didn't want to hide it give the fact that mortgage offers can be withdrawn at any time. I didn't want to be one of those nightmare stats where 2-3 days before completion the rug is pulled...

I realise I have been a complete idiot and am thankful that my wife hasn't killed me when I told her this morning.

My fear is how to approach this with the lender - I mean this would set alarm bells ringing right ! If they pull the offer then I stand to lose my deposit too. 'Ok Mr X why did this credit card suddenly go from X to X - Well I frittered it away in a drunken moment of stupidity...'

I will be definitely talking to my advisor on Monday about this and how best to proceed. In the meantime I am going to seek some GA assistance as this needs my utmost attention.

Fantasticfool

I think the only way around this would be to clear all of the credit cards prior to completion - I am going to see if I can get some help with this.

Fantasticfool

Luckily enough my folks are going to help me out of this ! I am so lucky to have that facility of support - i will be able to clear the balances by August.

libf

Make sure you stick with the GA. That's a heck of a debt to wreck up in one evening and you're parents are unlikely to want to repeat their generosity if it turns into a regular thing.

mrstick

Is there any worry that you may do the same thing again once you have the mortgage?


I think that I'd be thinking more about that than whether it would scupper the application, to be honest. We all do crazy things sometimes though...

Fantasticfool

Thanks for the replies guys and gals.

There is no danger of this happening again ! I realise how irresponsible I have been and VERY lucky to have support to sort this mess out. I am currently talking to gamcare.org online and setting up a weekly counselling schedule. In terms of repeat I am confident that I will take measures to ensure this is a one off.

I have spoken to my card providers and they are happy with what I have arranged - I am just freaking out that if my lender does CRA check prior to completion they may pull the offer.

I am going to talk to my solicitor tomorrow and also the MA. Ideally I will ensure my financial position is the same or better than when I applied for the mortgage so that if they recheck prior to completion then there shouldn't be any issues.

All in it's a real mess but thankfully I think I can sort it.

Kindest Regards

FF

Fantasticfool

Out of curiosity although my CC will show at lot of cash going through them if I pay them in full i guess this will have no impact on my file right ?

chanz4

If your parents are clearing, don't tell the sol or ma as they have a duty to inform the lender

libf

File won't be impacted in terms of late payments. Obviously until you've paid it the % of credit used will have increased which may be a problem if a check is done and it's flagged.

If the lenders needed statements that might also be an issue as some will frown upon gambling transactions, especially at that level. Unlikely you'd be added for credit card statement though.