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Loan Application before Mortgage Completion
laurena1990
Posts: 10 Forumite
in Loans
Hi all,
I hope someone can help me?
My partner and I have been accepted for a mortgage, contracts have been exchanged but as the property is a new build we're still waiting for completion (due to complete in March/April). My partner had £3.5k of debt on a credit card when we were accepted for the mortgage. To reduce the amount of interest he was paying, he has transferred this into a personal loan and paid off the credit card.
Does anybody know if this will have a negative effect on our mortgage application as we haven't yet completed? Will they do another check before completion?
Thank you
I hope someone can help me?
My partner and I have been accepted for a mortgage, contracts have been exchanged but as the property is a new build we're still waiting for completion (due to complete in March/April). My partner had £3.5k of debt on a credit card when we were accepted for the mortgage. To reduce the amount of interest he was paying, he has transferred this into a personal loan and paid off the credit card.
Does anybody know if this will have a negative effect on our mortgage application as we haven't yet completed? Will they do another check before completion?
Thank you
0
Comments
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They will do final checks before they actually release the funds. It could have a negative impact as it will show further credit commitments which will impact on affordability.laurena1990 wrote: »Hi all,
I hope someone can help me?
My partner and I have been accepted for a mortgage, contracts have been exchanged but as the property is a new build we're still waiting for completion (due to complete in March/April). My partner had £3.5k of debt on a credit card when we were accepted for the mortgage. To reduce the amount of interest he was paying, he has transferred this into a personal loan and paid off the credit card.
Does anybody know if this will have a negative effect on our mortgage application as we haven't yet completed? Will they do another check before completion?
Thank you"Facism arrives as your friend. It will restore your honour, make you feel proud, protect your house, give you a job, clean up the neighbourhood, remind you of how great you once were, clear out the venal and the corrupt, remove anything you feel is unlike you... [it] doesn't walk in saying, "our programme means militias, mass imprisonments, transportations, war and persecution."0 -
It could have a negative impact... was he asked to clear it as a condition of your mortgage application?Dwy galon, un dyhead,
Dwy dafod ond un iaith,
Dwy raff yn cydio’n ddolen,
Dau enaid ond un taith.0 -
Thank you. Is it seen as a further commitment though as it has cleared £3500 of credit card debt? The credit card has been closed so the debt has been transferred to a loan instead of increased.0
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Oakdene, no he wasn't asked to clear it as a condition but he did as the 0% interest period ran out.0
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laurena1990 wrote: »Thank you. Is it seen as a further commitment though as it has cleared £3500 of credit card debt? The credit card has been closed so the debt has been transferred to a loan instead of increased.
Depends on when the final check is done. Companies may be quicker to report new credit than close down old accounts. As such it might look like having more credit.0 -
Ok, only asking as I had to clear my CC debt before completion.
The only thing I can think of is whether the monthly amount payable to the loan is significantly higher than the amount your OH was paying on the card itself...Dwy galon, un dyhead,
Dwy dafod ond un iaith,
Dwy raff yn cydio’n ddolen,
Dau enaid ond un taith.0 -
The monthly amounts are roughly the same however the loan payment is less towards interest and more towards clearing the debt.
Does a loan look worse on your affordability check than a credit card? As the amounts barely differ, its just the interest.0 -
the main challenge as someone above said is that the new loan may appear on his report some time before the old closed down card disappears so for that interim it will look like he has both. Hopefully it will have settled by the time they take a last look.I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
All views are my own and not the official line of MoneySavingExpert.0 -
Thank you, so if the account shows as closed by the time completion takes place it hopefully shouldn't have much of a negative effect?0
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that is the ideaI’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
All views are my own and not the official line of MoneySavingExpert.0
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