Credit Card Mortgage Conditions

J65ON

I have got a mortgage offer with my partner that has a condition that states that the balance on 1 of our credit cards (Barclaycard) is to be paid off as a condition of the mortgage.
I have 3 CCs 2 of which have a balance, which are being slowly paid off and were to be retained after the mortgage, the offer does not mention these and therefore are acceptable. The 3rd, the Barclaycard is active and is used for all my payments on a monthly basis and is paid off in full every month.

I've got no problem with paying off the card, the balance is only about £500 a month however does this mean that I cannot use it until the mortgage is approved? Do they expect a zero balance if (when) they check or will the last statement showing that the balance has been paid in full be enough?
With an anticipated heavy month before we move in, it would put a lot of stress on my cash reserves which I would rather not do.
Help appreciated

csgohan4

J65on wrote: »

I have got a mortgage offer with my partner that has a condition that states that the balance on 1 of our credit cards (Barclaycard) is to be paid off as a condition of the mortgage.
I have 3 CCs 2 of which have a balance, which are being slowly paid off and were to be retained after the mortgage, the offer does not mention these and therefore are acceptable. The 3rd, the Barclaycard is active and is used for all my payments on a monthly basis and is paid off in full every month.

I've got no problem with paying off the card, the balance is only about £500 a month however does this mean that I cannot use it until the mortgage is approved? Do they expect a zero balance if (when) they check or will the last statement showing that the balance has been paid in full be enough?
With an anticipated heavy month before we move in, it would put a lot of stress on my cash reserves which I would rather not do.
Help appreciated

Lenders can do a credit check prior to exchange/ completion so probably not worth the risk

Mummyto4kids

I posted a similar thread about this not so long back as our mortgage has a condition of paying off a CC. We've paid it and I wasn't sure whether we had to send proof but the advice I got seemed to be that generally they don't check and the onus is on the buyer to be diligent and pay if that's whats been agreed. We don't complete until May now so wont use the CC again now we have paid it off because we don't want to jeopardise the completion.

lorelai34

If it helps any we have a mortgage offer from Barclays and it states store card had to be paid off (was only £90) and 'no new additional borrowing' so we know we can't use our credit cards until we move.

JimmyTheWig

J65on wrote: »

I have got a mortgage offer with my partner that has a condition that states that the balance on 1 of our credit cards (Barclaycard) is to be paid off as a condition of the mortgage.
I have 3 CCs 2 of which have a balance, which are being slowly paid off and were to be retained after the mortgage, the offer does not mention these and therefore are acceptable. The 3rd, the Barclaycard is active and is used for all my payments on a monthly basis and is paid off in full every month.

Are you sure you've got the right card?
They're complaining about a card that you pay off in full each month? When you have balances on the other two?

Are you using a broker? Might be best to check with them or your solicitor.

J65ON

Thanks for your replies,
For clarity the condition states...

This offer is issued on the understanding that the following commitments will be repaid on or before completion of this loan:
Credit card with Barclays with an approximate balance of £498.
While the debts may be repaid from the proceeds of this loan, they may not be transferred to any other lender.

To answer some of the queries, the other cards were declared as not being paid off so they have done affordability based on these staying, the balclaycard was ticked as being paid off.

Now the amount when we applied has actually been paid off, I paid it off when I normally do at the end of the month. The difficulty is I've used the card this month and still have a 'floating' balance on the card. There is no clause saying I can't have additional borrowing so is this allowed?

Mummyto4kids

Id personally err on the side of caution - pay it off and don't use it - you can use it again I assume once your mortgage completes. Id just be nervous about doing anything that jeopardises such a big purchase.

marksoton

J65ON wrote: »

This offer is issued on the understanding that the following commitments will be repaid on or before completion of this loan:

The difficulty is I've used the card this month and still have a 'floating' balance on the card. There is no clause saying I can't have additional borrowing so is this allowed?

The bold answers your question.

Whether they check or not is debatable and seems to lie with your solicitor. Mine insisted on evidence,a lot of people never get asked for proof. I wouldn't take the chance...

J65ON

Thanks, I think that confirms what I first thought...ill pay off the balance to zero and not use it till the mortgage has gone through. I knew it was going to be a tight month...now it's a very tight month

rochey1098

If it's any consolation I know how you feel, we're in the same boat with naff all flash money and zero debts allowed for the next month... it'll be worth it in the end though

JimmyTheWig

J65ON wrote: »

For clarity the condition states...

This offer is issued on the understanding that the following commitments will be repaid on or before completion of this loan:
Credit card with Barclays with an approximate balance of £498.
While the debts may be repaid from the proceeds of this loan, they may not be transferred to any other lender.

If the debt may be paid with the proceeds of the mortgage, this suggests to me that they will happily give you your mortgage money before this debt has been cleared. After which you can simply clear the bill in full as you normally do.

However, it's one thing for a stranger on an internet forum (i.e. me) to say "you'll be fine, go ahead and use it" and another to take that risk yourself and risk the whole completion falling through. So I certainly wouldn't blame you for not using it between now and then!