How Does Large Credit Card Balance Paid in Full Affect Mortgage Offer?

elonii

Hi folks, hoping for a wee bit of guidance!

I'm just in the process of tidying up my credit file and general financial affairs before going for an offer in principle in a few weeks.

I'm self employed and running my business as sole director of a LTD company. I'm using personal credit cards to fund my monthly advertising costs. At any given time I have several thousand pounds sitting on two credit cards in my own name. This is essentially because a personal card gives better FX rates and charges (I spend a lot in dollars).

These are paid in full every month, but will they affect any offer due to high credit limit utilisation at point of credit check, or do they tend to look at the fact they are always cleared?

I know I should get a card in the business name, but it'd cost me a few hundred quid a month in charges. Which is not desirable, but I'll do it if I have to for the duration of operation "get a home"!

I am having to get a mortgage on my own due to my husband not being a UK citizen, so I really need to make sure I get everything right first time. Particularly if that dream house is close to our upper borrowing limit (isn't it always?!)

Sincere and humble thanks in advance for advice. Google doesn't seem to be giving me the exact info I need!

Lilla_D

Hi,

Most lenders ask whether the credit card balance will be cleared by the time the mortgage starts or not, so for them it's not an issue, if you have a balance now.

However, there are lenders who don't ask the question about clearing the cards, they just ask for the balance and take it as a commitment.

Dependent on your circumstances, and thus the likely lender choice, it might or might not be beneficial to clear the cards prior to the application. If you discuss your situation with a broker, they will be able to advise you when considering all the case details.

elonii

Thanks for that, everything does come back to speak to a broker with questions like these!