Will Small Credit Card Debt Affect Re-mortgage

neogeo

Hi all,

My current mortgage expires end of December 2015 and I have a question about credit card debt.

I took out a credit card for the first time earlier this year and have used it sparingly, paying it all off immediately.

I took it to the US with me this year (just returned), and put about £1,000 on it.
I am able to pay it all off in one hit, but as it is interest free for another 14 months would prefer to make monthly £100 payments.

Would it affect me getting the best deal on a re-mortgage if I leave the debt on the card, or would it be best advised to pay it off immediately?

I am looking at getting a 2 year fixed at about 1.25% with an LTV of about 60% - this rate looks to be about the best on the market at the moment for a 2 year fixed.

An advice appreciated.

Thank you!

libf

Are you planning to change lenders or stick with your current mortgage provider?

neogeo

Am looking at changing from Virgin to either Yorkshire or the West Brom.

Humphrey2012

I would assume it would affect how much you can borrow, i.e. affordability. However I wouldn't have thought it would affect it much as it's not a big amount.

libf

neogeo wrote: »

Am looking at changing from Virgin to either Yorkshire or the West Brom.

Then I would plug the numbers into their affordability calculators with the minimum payments first and then with the £100 payments next, and see how it affects the results.

catriona79

I've just got everything set up for a completion on Monday. 60% LTV with Nati0nwide, borrowed £110k against a £210k house.
The £110k consisted of 100k mortgage and a £10k homeowner loan.
I have £9.5k credit card debt and Nationwide offered me £140k Max. No problems at all.
Noddle credit rating 4/5.

You sound like you're v sensible, and Nationwide are fairly strict so you shouldn't have any problems.

On another note, the mortgages you are looking at all carry hefty fees, but there are good deals at 1.49% apr and fixed for two years.

catriona79

Humphrey2012 wrote: »

I would assume it would affect how much you can borrow, i.e. affordability. However I wouldn't have thought it would affect it much as it's not a big amount.

Yup, that's what I've been told too. Basically calculate 4.5x annual salary (basic) and deduct any debt.

neogeo

Thanks all.

The LTV is well within below 65% so I think I should be OK with leaving it.
I'll check with the mortgage company what they think before I submit if I need to.