Best use of credit cards prior to mortgage

baz8790

I am planning to apply for a mortgage in the next 3-6 months.

After a few years of bad debts I have everything paid off and all defaults are now off my credit record (Older than 6 years)

The only things on my credit file are a £1k overdraft which I have never used and had the account for 5 years

A mobile contract with Vodafone

A barclaycard credit card that I have had for 13 years with a £5k limit

Capital one card £800 limit 2 years.

I have been using the barclaycard for fuel and paying the balance in full by direct debit every month.(£120)

Should I continue using the card like this?
Should I decrease my credit limit?

And should I close the capital one card?

I just want to make sure that have the best chance of being approved for a mortgage

Ideally I will be looking at a £125k flat with a £25k deposit, £32k basic salary

Any advice is greatly appreciated

Thrugelmir

Do no different than you already are. Use of cards makes no difference if you are repaying balance in full.

Open a Help to Buy ISA it'll give a small boost to your savings.

baz8790

I already have a help to buy isa with Halifax

Just concerned that the available credit might count against me.

AnotherJoe

My daughters mortgage adviser advised her to switch most payments to debit card for the few months before application because apparently otherwise they count it against you, eg if you have say £2k on a card during the month they regard that as a debt even if you pay it off at the end of each month.
So forgo those airline miles etc for a few months.

MFWannabe

I would continue you as you are, you should be fine. I was lucky enough to get a mortgage last year and I was exactly the same as you; using a credit card and paying off in full every month
Paying off a credit card every month in full shows you are good with paying credit
You shouldn't have much of an issue obtaining a 100k mortgage on a salary of 32k IMO
If you are concerned speak to a mortgage broker.

baz8790

Thanks I will just continue with what I am doing.

The balance on my card is only about £120 every month.


I am planning to see a mortgage advisor in 3 months as that's when I will have the deposit, fees and money for furnishing saved up.

AnotherJoe

I suppose if you are well within your limit its not an issue. My daughter was close enough that a few k potentially made all the difference.

Thrugelmir

baz8790 wrote: »

Just concerned that the available credit might count against me.

Not excessive.

If you have no intention of using the card might as well close it. As will do no harm.

MFWannabe

baz8790 wrote: »

Thanks I will just continue with what I am doing.

The balance on my card is only about £120 every month.


I am planning to see a mortgage advisor in 3 months as that's when I will have the deposit, fees and money for furnishing saved up.

Good luck with your house search. Exciting and scary at the same time but sooooo worth it

amnblog

AnotherJoe wrote: »

they regard that as a debt even if you pay it off at the end of each month.

This is not the case with the majority of Lenders.