Getting ready for a mortgage application - credit card situation

The_Boss

Hi all,

At some point in late 2017 we will be applying for a joint mortgage - by then myself and fiance will have around £80k equity, £20k in savings and no debt other than the present mortgage. The present mortgage is in my fiance's name and she has one credit card with a 4k limit, perfect repayment history on this, the mortgage (10 years) and mobile phone account and nothing of concern on Experian file (we will be checking Equifax too).

As far as I'm concerned, I have a long and perfect repayment history and no credit card debt as of next week. I have 5 credit cards as follows :

Barclaycard - £5k limit, had since 2007
Tesco bank - £4.5k limit, had since start of 2013
Halifax Clarity - £4.5k limit, had since start of 2012
Virgin Money - £8k limit, had since mid 2015
M&S - £4.5k limit, had since August

What should I do about closing/reducing limits? Ideally I'd like to keep the Halifax, M&S and Tesco cards (the first for foreign currency reasons, the latter two for rewards) so am going to close the Barclaycard and Virgin Money cards in January. But will keeping these three impact significantly on a future mortgage decision? If so, would it be better to close one or two of these or reduce the credit limits down? I could do with keeping the £4.5k on the Tesco card but could reduce the Halifax to £500 and M&S to £1k, but not sure if this will also reflect poorly as it may look like I can't be trusted with high limits. Any advice or first hand knowledge welcomed.

Thrugelmir

There's certainly no harm in closing down in unused accounts. Make sure that you do any housekeeping well before the mortgage application.

shortcrust

I paid off and closed all but two of my cards six months before applying for my mortgage. I also reduced the total amount of available credit to below 50% of my income. Seemed sensible but who can say whether it was necessary or not. I got the mortgage so I'm happy either way!

The_Boss

Thanks guys. So on a salary of £30k I guess I should be ok to keep 3 cards open with a total credit limit of £13.5k. I'll just go ahead and close the Barclaycard and Virgin Money accounts in January and maybe down the M&S and Halifax ones by £1k-£2k each in February.

morwok

We just got our mortgage agreed and I had well over 50% of my salary available in credit cross about 7 cards. Never seemed to make any difference as they are always paid off in full.

DisneyLisa

I got a mortgage in June and have over 100% of my income as available credit. My mortgage was processed in under a week with no questions

The_Boss

Ok, after a couple of delays we're planning on applying for a mortgage in May 2018.

Two new questions please

1) If I switch my bank account from HSBC to Yorkshire now (6 months in advance) will there be any detrimental effect on the mortgage application? I already switched my account to HSBC in February and to Co-Op in August 2016 (having been with Halifax for 4.5 years).

2) I put a number of work expenses on my credit cards so the amounts look higher than I'd spend if it were my money. When applying for my mortgage will the underwriter want to look at individual transactions on my credit card statements, or do they just take the monthly data held by the CRAs?

The_Boss

Bumpty bump