Preparation for a mortgage

The_Boss

Hi all.

Will be looking to apply for a mortgage during the latter first half of next year so wanted to start prepping for it (my partner is totally debt free with good savings and equity, has only one card and a flawless payment history on this card, her mortgage, mobile and TV contracts etc). I have the below questions :

1) I've been with my bank (Halifax) for 4.5 years, but am presently switching to the Co-operative bank. Will the fact I've had the account a relatively short amount of time have an impact on my application?

2) My salary is £30k. I have four credit cards - Halifax Clarity with £5,100 limit (had this card since Jan 2012), Tesco Bank with £4,500 limit (since Feb. 2013), Barclaycard with £5,000 limit (since early 2010) and Virgin Money card with £8,000 limit (since July 2015). I intend closing the Virgin card once I've paid off the balance transfer, which will be done by the end of the year. Should I consider reducing the limits on the other cards too? With Halifax ending the Clarity cashback I'll probably lower this to £1k at some point and only use for annual holidays

3) Do we need a joint current account to apply for the mortgage, or only for if/when accepted?

4) When applying for a mortgage and the underwriter assesses regular outoings, will they take into account individual transactions or just month end balances? I'm a little concerned that closing my bank account/cards could mean I lose this...

The_Boss

*bumpty bump*

TwentySomethingGirl

Hi


I don't know much about most of your questions but you don't have to have a joint account at all.

Joy_mate

1. Try to get ISA account information, it might help you for home purchase. (Only if you can manage with all its T&c's)
2. Length of account will not make any difference in getting mortgage. It's completely your affordability at that time of applying.
3. Keep checking ur credit score (both of you)
4. Never miss any payment or DD.
5. What's the point of keeping credit cards if you are not using. Try to shorten ur credit file. Keep 1-2 credit card with decent credit. Once your mortgage get approved just apply back for the same.
6. Joint account is not mandatory.
7. Underwriter will check ur expense against ur income, by anyway but not individual transaction, (depend on his/her mood)
8. Keep nice and clean record for min 6 months from the date you apply.
9. More the clarity in your information provided more the chances for approval.
10. Affordability is must.

Thrugelmir

With regards to credit cards if you don't need or use them close them. Only keep open what you use.

Switching banks shouldn't be an issue. As any previous history will still be visible.

Best to take any action now rather than later. As CRA's merely record changes. They've no idea as to the reason why. So by default report negatively. Time restores the equilibrium though.

The_Boss

Cheers guys. Yeah, I won't be applying for any more other accounts up until the mortgage, and that will be at least 8 months away anyway.

I'm definitely closing my Virgin card when the balance transfer is paid off in December this year, leaving me with my Tesco Card, Barclaycard and Halifax Clarity. I'm loathe to closing the Barclaycard (although I don't use much thesedays) as I've had it by far the longest and it will also be useful for super balance transfers in future after the mortgage. May just cut my Clarity limit from £5k to £1k since I'll only be using it on holidays and honeymoon in future since they have axed the £5 monthly incentive (all my spending will shift to the Tesco card).

Thrugelmir

The_Boss wrote: »

I'm loathe to closing the Barclaycard (although I don't use much thesedays) as I've had it by far the longest and it will also be useful for super balance transfers in future after the mortgage.

Hence why lenders monitor the amount of credit facility you have available. Tells them a lot about you.

The_Boss

So would it be better to reduce the credit limits then?