is this a good idea?

optiplex_2

My existing 0% rate ends in 8 weeks, so I was going to apply for a Virgin card and transfer the balance (£2200)

BUT, we are currently trying to buy a house.

I am worried that if I apply for the Virgin card, and get declined, this will affect our ability to get the mortgage we want?
I check my credit rating regularly and it is all green, so I don't know why I would be declined, but I don't know whether I should chance it?

Any advice would be really great, because I don't want to pay 15.9% APR!

Thanks
optiplex

FelOn_2

When you buy your house, the loan will be secured on your property and you will be OK, if you put down enough deposit. CC's are unsecured and work under different lending criteria.

welshnoonoo

Funnily enough - I am in the same boat but mine is my second move and my understanding is that whilst the type of debt that is on a credit card is different as FelOn quite rightly points out, the mortgage company may well deduct whatever is outstanding from the amount it says it will lend you.

So for example if your income multiples meant you were elgible to borrow £100K on a mortgage and then you have £2K outstanding debt with credit cards or loans etc, they may deduct the £2K from the £100K and only offer to lend you the £98K.

That is has been my experience in the past anyway.

YorkshireBoy

welshnoonoo wrote: »

...the mortgage company may well deduct whatever is outstanding from the amount it says it will lend you.

By way of a practical example, I've been informed by YBS that they are not concerned by 'available' credit (so the OP wouldn't be disadvantaged by having an additional card - for a short time at least). They do, however, place far more importance on 'used' credit. So much so that they reduce your salary(ies) by 36% of the debt* before applying their lending multiples.

The only thing that may impact on the mortgage acceptance is the addition of another search on the credit file.


* 36% (very roughly) equates to a years minimum payments at 3% per month.

optiplex_2

thanks very much everyone.
i think if our offer gets accepted on the property we want, i will leave it until the mortgage is sorted to apply for the Virgin card.
meanwhile i will try to pay a chunk off this month!