Pay off stooze before mortgage app?

Telhearne

Hi All,


I pan to move house next year and I currently have £9k on 0% interest offers split between 2 credit cards.


In the eyes of a potential lender I can imagine this will ring alarm bells but I am purely using the debt for flexibility and to earn interest. I am frugal enough that I will always have an excess so the balance can be paid off at any one time.


In light of this can somebody please offer advise on the following:


1. Is having the debt harmful to my credit rating and therefore be bad for my application?
2. If I do not declare the debt will the bank find out anyway?


Many Thanks

[Deleted User]

It will depend on your mortgage requirements, LTV, income and so on. You don't have a generic credit rating.

The bank will see your commitments on your credit files. Don't lie about stuff when applying for a mortgage.

phillw

Telhearne wrote: »

2. If I do not declare the debt will the bank find out anyway?

You will give them permission to look at your credit history as part of your application & that will show all your negative balances, so I assume they will find out anyway.

I have always done mortgage applications face to face, which gives you the chance to ask them questions like that. I'm sure asking them whether they would be happier if you paid the debt off would come across better than lying about it.

If you have to go through affordability checks (borrowing more or changing lender) then stoozing probably will cause you problems as I can't see that they would or even could build allowances for it into their system.

ricky_v

I've got over £3k at 0% over 3 out of 6 credit cards and that was no problem during a very recent mortgage application. 60% LTV borrowing approx 2.5 times gross salary.

They seemed more interested in the monthly repayments for those cards during the affordability interview.

Hope this helps, good luck!

Anonymous101

I agree with the above... I've moved house within the last 12 months and the lender was not concerned with the overall level of debt only the perceived affordability.

Money_spending_mummy

I do some stoozing using credit cards and in my experience a mortgage lender will look at the monthly repayments to credit cards as part of the affordability review. I have enough in savings to pay off my 0% credit cards if necessary but the lenders cannot see savings balances, only the credit card debt. If you might be a bit tight on the affordability checks I would advise reducing the credit card balances a few months before applying for a mortgage. We were turned down for a mortgage due to the perceived credit commitments to credit cards making the affordability of our debt repayments look a little tight. We got a different mortgage without issue so it also depends on the lender.

splatt30

I had £8000 in a stooze. When I made initial mortgage enquiries I was told I could borrow £150k. That jumped to £225k if there was no credit card debt. (Can't remember exact figures, but you get the idea). SO I paid the credit card off to get the mortgage, and have now (a year after moving) rebuilt a stooze pot of £30k.

seatbeltnoob

splatt30 wrote: »

I had £8000 in a stooze. When I made initial mortgage enquiries I was told I could borrow £150k. That jumped to £225k if there was no credit card debt. (Can't remember exact figures, but you get the idea). SO I paid the credit card off to get the mortgage, and have now (a year after moving) rebuilt a stooze pot of £30k.

How are you benefitting for this stooze? there's barely any interest these days.

seatbeltnoob

ricky_v wrote: »

I've got over £3k at 0% over 3 out of 6 credit cards and that was no problem during a very recent mortgage application. 60% LTV borrowing approx 2.5 times gross salary.

They seemed more interested in the monthly repayments for those cards during the affordability interview.

Hope this helps, good luck!

why do you have 6 cards?

MallyGirl

seatbeltnoob wrote: »

How are you benefitting for this stooze? there's barely any interest these days.

I have 5% and 6% regular savers and bank accounts plus the rest offsets a 3.9% mortgage

[Deleted User]

Same here, bulk of stooze funds are now in regular savers mainly at 5 to 6%.

Shortly applying for another CC, probably Lloyds 24 month 0% BT with no fee, to keep the gravy train rolling

Paid off a couple of BT cards last year so fingers crossed!

Cheers