Remortgage to extend current property

clarky9

Hi everyone,


We are looking to remortgage to extend our current home when our current deals runs out in a couple of months. We have approx 5K debt on credit cards and overdraft. I am due to get a works bonus that would clear this debt, but I am wondering whether it would be better to keep the £5k separate to show the lenders that we have some cash to put towards the work and keep the debt as it is?

Farel01

clarky9 wrote: »

Hi everyone,


We are looking to remortgage to extend our current home when our current deals runs out in a couple of months. We have approx 5K debt on credit cards and overdraft. I am due to get a works bonus that would clear this debt, but I am wondering whether it would be better to keep the £5k separate to show the lenders that we have some cash to put towards the work and keep the debt as it is?

Hi and welcome!

Ok so lenders don't look at savings usually. However they do look at credit cards and overdraft so you are definitely better off to clear any debt. Mortgage providers look at affordability as a income - outgoings, disregarding what you have in the bank as savings.

Good luck!

Boredatwrork

For many lenders:

5k in debt (generally) looks worse, than 5k in savings looks better.

clarky9

Great advice, thanks very much!

Thrugelmir

Cash and debt do not sit in separate pots. They offset each other. In effect you have no savings.