Mortgage Advice

FTBALICE

Hi All,
I am new here but really panicking about our mortgage application! This house means a lot to us and would be devastating if we lost it.
We are currently mid application for a mortgage. We passed the initial affordability fine, but they now need some supporting documents and questions answered!!
Basically, we have around 5k of credit card debt. Although not massive, it is causing me a lot of stress!
We haven’t used the cards for around half a year now, and are just working on reducing the balances.
However, the mortgage company have come back to us asking for a reason behind the 5k of debts, this wouldn’t be a problem but the real answer is I don’t really know. We had a few holidays which we paid on them and other bits but nothing as one big reason. Will they reject us because we can’t for instance say, ‘this is because we did our house up, ect ect.’ ?
What is the best way to answer their question?

Thanks a lot for all the help in advance – from one VERY nervous FTB.

marliepanda

It'll be deducted from whatever deposit you have in most cases.

Really all debts should be paid off if possible unless your LTV is fairly low

FTBALICE

Hi, they will not be paid off with the deposit as it is a high LTV so the question was just how is best to answer the underwriter? They are just asking for a reason for the debts?

Thanks :-)

marliepanda

FTBALICE wrote: »

Hi, they will not be paid off with the deposit as it is a high LTV so the question was just how is best to answer the underwriter? They are just asking for a reason for the debts?

Thanks :-)

Be honest as they'll be able to check. Say holidays and everyday spends. If they're not happy with it, just say you'll pay it off
I made a mistake, if your LTV is low (aka a hefty deposit) it may not matter.

robatwork

Can you give us (ie. strangers liek the underwriters) a good reason why you would be keeping an expensive debt on a credit card? Is it a special 0% card? If not, they may be thinking....

Most people know a credit card debt is the most expensive way to borrow money over 6 months, so if they are struggling to pay this off they must have 0 spare cash each month, so not a good risk for us to lend to.

You need to plausible reason why you have this debt for so long rather than for example an overdraft. Try us.