credit card debt for remortgage

kernowbeetle

Hi,

We have around £10k on 0% credit cards and are looking to remortgage in July to come off a fixed and hopefully get as low a deal as possible.

Currently the debt is split over 3 credit cards (close to maximum credit limits) but we also have two other cards with £0 debt but up to 13k credit limit.

For our remortgage is it better to close the two cards down that have no debts or is it better to keep the two cards with 13k free limit to show we have only used say 45% of the available credit?

Thanks

obay

This would effort your affordability, it's better to try and close the cards down to the lowest you can before you remortgage.

kernowbeetle

Thanks, do you mean reduce the balance to the lowest it can be, or reduce the amount of cards (and therefore available credit)?

Unfortunaltey we do not have much scope for reducing the debt by a great deal before remortgaging, it is the hope that a reduced mortgage rate will leave us more cash to pay off the debt quicker!

kingstreet

Lenders typically charge you upto 5% of the balance on cards for mortgage affordability and frankly, they don't care if it's on one card or spread across a few.

The interest rate is also irrelevant.

kernowbeetle

thanks for that, I had a feeling it would just be the amount of debt that mattered, not where the debt was or at what rate.
I will leave them as they are for now then and see what deal we can get.

thanks