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Relationship of credit card balance to offered mortgage
GoldStandard
Posts: 12 Forumite
I have a substantial cash deposit for my next house purchase (40-50% of purchase price).
I also have a balance of just over £10k on a credit card which is interest free until the start of next year so I am just making minimum payments currently.
Although I have a large deposit I will be right on the limits of how much I can borrow when purchasing the new house.
To keep the £10k in my coffers (it's interest fee after all) I would rather pay it off later rather than sooner however looking at online calculators I can see that the £10k balance can effect borrowing by up to £50k.
Is it simply a case of paying of the card now in order to obtain the largest borrowings? More specifically what is the relationship between the outstanding balance and mortgage offer?
Thanks in advance.
I also have a balance of just over £10k on a credit card which is interest free until the start of next year so I am just making minimum payments currently.
Although I have a large deposit I will be right on the limits of how much I can borrow when purchasing the new house.
To keep the £10k in my coffers (it's interest fee after all) I would rather pay it off later rather than sooner however looking at online calculators I can see that the £10k balance can effect borrowing by up to £50k.
Is it simply a case of paying of the card now in order to obtain the largest borrowings? More specifically what is the relationship between the outstanding balance and mortgage offer?
Thanks in advance.
0
Comments
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£10,000 of credit card borrowings may cost you around £24,000 to £30,000 of mortgage borrowing.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Is that the standard multiple of CC debt to borrowings?
I must admit the HSBC calculator I was using was showing £48k difference in borrowings.
Is it as simple as just paying off CC ASAP if I may need the mortgage borrowing? I have the funds but would rather they remain liquid in my account.0 -
Just a guide.
Your own circumstances may greatly affect it as will the lender.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
GoldStandard wrote: »Is it as simple as just paying off CC ASAP if I may need the mortgage borrowing? I have the funds but would rather they remain liquid in my account.
Lender doesn't know that you actually have the liquid funds also will only see minimum repayments being made. That's their starting point. A totally polar view to yours.0 -
Thrugelmir wrote: »Lender doesn't know that you actually have the liquid funds also will only see minimum repayments being made. That's their starting point. A totally polar view to yours.
So you are advocating me paying off the CC ASAP? That was my question.
Incidentally the lender does know I have the liquid funds as it is held in various instant access products of theirs.0
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