First Time Buyer - Credit Card Balances

JDC14

Hi

Is it possible to get a mortgage as a first time buyer with current or recently cleared credit card balances?

As you can see in my signature, I have a chunk of balances, but thanks to family gifts we have an ok deposit to buy.

I meet all payments and I am paying above the minimum payment on two. Current limits are £14.1k (I have a barclaycard with 0 balance as I didn't want my balance to limit % to be too high).

Is it likely I would need to clear these completely and wait a bit? Or can I still get a mortgage with these (or actually smaller) balances still in place.

juniordoc

I guess it depends on how these balances compare related to the size of your house deposit/the mortgage total you're applying for and your income too.
If your income is 60k, you want a 250k mortgage and you have a 50k deposit then these credit card balances probably aren't a big deal.
If your income is 30k, you want a 200k mortgage and you have a 10k deposit then your credit card debt becomes much more relevant.

jlaw4

Im a FTB and we have CC balances mine are £4k in total and his are £3K we earn around £50K between us and we have a DIP for £170K that was done in a rush and was only a soft search,

I'd recommend going to a broker and using the nationwide affordability... plus the MSE was almost bang on what we were given as a DIP but every month these balances are reducing... it all depends on your individual circumstances

cashbackproblems

I have 3k on an interest only CC and had no problems getting a mortgage. Never a missed minimum payment etc.

JDC14

jlaw4 wrote: »

Im a FTB and we have CC balances mine are £4k in total and his are £3K we earn around £50K between us and we have a DIP for £170K that was done in a rush and was only a soft search,

I'd recommend going to a broker and using the nationwide affordability... plus the MSE was almost bang on what we were given as a DIP but every month these balances are reducing... it all depends on your individual circumstances

Thanks jlaw!

I have just over £7k as you can see, between us we earn about £55k, so hopefully with our deposit, we'll still get a decent offer. Going to keep reducing the balances as much as I can anyway, hopefully bring the offer right up.

jlaw4

JDC14 wrote: »

Thanks jlaw!

I have just over £7k as you can see, between us we earn about £55k, so hopefully with our deposit, we'll still get a decent offer. Going to keep reducing the balances as much as I can anyway, hopefully bring the offer right up.

Your welcome, i had exactly the same reservation until i plucked the courage to just go and meet a broker. I was told £220K by three brokers and the CC was a LOT higher i.e another £4k but thats on a 6mnth 0% so we are clearing that this month.
I was told by my MB that they only take into consideration a minimum payment or anywhere upto 7% of the balance so i knew i'd need a bit of help navigating who would have us. Apparently having a HTB isa can be looked at favourably too as it demonstrates long term saving (we've had them since day one and paid the full amount each month) hope it helps! We did wait though so we are at 10% as we save around £80-£100 p/m and have had a stroke of luck in our jobs so we have a bigger budget.

Heather2603

We have £12K on credit cards and are currently in the process of buying our first home. We're buying a cheap house though for £70K and earn about £45k between us.

ashp_2

I had 4k on a 4k limit CC when we applied. We earn about 60k and got a 270k mortgage. Our mortgage advisor said as long as the CC balance is included in the affordibilty calculations it's fine.

We went with Santander you, can use their affordibilty calculator online.

JDC14

Heather2603 wrote: »

We have £12K on credit cards and are currently in the process of buying our first home. We're buying a cheap house though for £70K and earn about £45k between us.

I wish! We're right in the South East so a 2-bed terrace in the "not so nicer" areas that need work are still £220k minimum! Still don't think I'd want to live anywhere else (for now at least!)

JDC14

jlaw4 wrote: »

Your welcome, i had exactly the same reservation until i plucked the courage to just go and meet a broker. I was told £220K by three brokers and the CC was a LOT higher i.e another £4k but thats on a 6mnth 0% so we are clearing that this month.
I was told by my MB that they only take into consideration a minimum payment or anywhere upto 7% of the balance so i knew i'd need a bit of help navigating who would have us. Apparently having a HTB isa can be looked at favourably too as it demonstrates long term saving (we've had them since day one and paid the full amount each month) hope it helps! We did wait though so we are at 10% as we save around £80-£100 p/m and have had a stroke of luck in our jobs so we have a bigger budget.

I might need to man up and go and see a broker. I'm currently avoiding anything House purchase related as I'd hate to hear my stupidity has completely set me back! I expect I won't get the same offer I would without the debt, but I'm desperate to own a house so hearing it's not possible would be killer