Mortgage Offer - You Must Repay The Following Commitments in full with 30 days...

Finst

In my limited knowledge, its always been quite common for mortgage companies to require you to clear credit card balances at the point you buy a house.

Having a rolled over credit card balance indicates you might not have any savings buffer and an unexpected expense could tip you over the edge into being unable to pay the mortgage - and buying a house means many possible expenses, broken boiler, urgent repairs etc.

By checking whether you can afford to clear any short term high interest debt pre-sale, they have a practical spot check on your financial position that goes beyond the theoretical affordability criteria.

moneyistooshorttomention

With the figures you've stated - then that covers the overpayment you plan on/

I guess its the lender taking a "broad brush approach" of covering themselves in case you (being a couple) have a little "accident" (ie get pregnant) and the income would go down/expenses go up.

EDIT; and the point Finst makes as well - ie I expect the new owners of most houses find something or other the vendor has covered up - cue for unexpected expenditure.

theEnd

dannyiddo wrote: »

But the thing, it is well with affordability, so I don't understand it.

Don't look for logic. It's a checkbox on their computer.
As others have said, pay it off, don't use it till completion.
Once completed, you should be able to do what you want.

swishy87

Our offer says our cards must be paid off in full before or on completion, but the solicitor said they don't check. However, they were all paid in full before application, they just weren't showing up on the system.

I've had to pay for a holiday this month, and we are between exchange and completion, and I have put it on credit card for the protection, but can pay it off as soon as the bill comes through. Hopefully that won't make any difference to our offer as long as it is paid of before or on completion.

martindow

No bad thing to pay it off anyway. You must be paying lots of interest if you are only repaying the minimum repayment each month

kamdeux

Seems to be fairly normal, we got our offer from Woolwich/Barclays and they want us to clear the whole amount of the PCP we have on the family car which is just not an option.

jamesperrett

Seems pretty standard for Woolwich/Barclays. Had this on an application from 15 years ago and I seem to remember I just ignored it back then.

gregsayer

I had similar when buying my new house
even though it was a 70% LTV mortgage, and i could afford the repayments without issue the
bank still wanted me to clear several small loans


I just stipulated to my mortgage broker i would keep a little back from the sale of my house, and take out a slightly larger mortgage and pay off the loans when the excess funds were returned by my solicitor.


in the end i didn't pay off a DFS loan as it was interest free until 8 months later, nobody checked?