Credit Card Balance vs. Loan

stu2500

Could someone advise me if it is better to have a loan or credit card balance when applying for a mortgage? The reason I ask is that I have a loan which I pay every month (no missed payments or anything untoward), but I also have the facility of an interest free money transfer on a credit card of mine. My thoughts were to pay off the loan with a money transfer and continue to pay the credit card balance off as normal. Would this look more favourable on a mortgage application, or is it very similar to having a loan?

Thanks in advance.

kirtsypoos

If I remember rightly from my mortgage application, the monthly loan amount was accepted as the monthly payment whereas it was a percentage of overall CC debt which was taken as the monthly payment (5% I think) so for example, my loan for £13000 had a monthly repayment of £300 whereas the potential figure taken (even if not the minimum payment) of 5% would have been £650... so even with paying interest I was better off keeping the loan until I completed, when I moved it onto 0% CCs

Hope that makes sense!