Will bug amounts paid to clear debt effect credit application.

hannahroberts1985

Mortgage broker advised me to clear my loan and cc pre application. I did this from my savings but now worrying the large payments from my account will effect my application?

Thanks in advance for any advice.

G_M

Payments from your savings won't affect your credit rating.

loans and unpaid cc balances will.

hannahroberts1985

i was just a bit worried about big payments being made and theses being taking into account as normal spends in terms of my affordability.......guess like you say it's better than the loan still existing so I'll hope for the best.

kingstreet

Are you using a lender that needs bank statements?

hannahroberts1985

I've a meeting with my broker next Wednesday to get the ball rolling.

kingstreet

So your application might be placed with one of the many lenders that doesn't require bank statements and will therefore know nothing of your payments?

How long ago did you settle these commitments?

If it was in the last three months, chances are they will still be visible as outstanding on your credit file and they will have to be entered in the application as "to be repaid on or before completion" so they aren't included in mortgage affordability calculations.

Frankly, I'm surprised an experienced broker requested repayment of commitments now, unless they were taking a very long run-up to the application of perhaps three to four months to make it worthwhile.

hannahroberts1985

Yesterday.....

Would obtaining letters from the loan provider stating the amount had been cleared be of any help.

kingstreet

hannahroberts1985 wrote: »

Yesterday.....

Would obtaining letters from the loan provider stating the amount had been cleared be of any help.

I've never been asked for, or needed such, in my 33 years doing this job.

Like I said, you simply enter "to be repaid on or before completion" if it's been repaid in the last three months, or will be in the next three..

The credit system doesn't update in 'real-time' so the data a mortgage lender can see on your credit search might be months out of date. We just try to ensure we cover all the bases and not assume they can see what we know.

hannahroberts1985

Oh k I see thanks.

Guess I need to stop worrying and over thinking I've done all I can just time to wait and see.

Thanks for taking the time to answer my question. It is very much appreciated.

kingstreet

Just remember, you can spend YOUR money how YOU want and it simply isn't necessary to eat only beans on toast in the three months before you apply for a mortgage.

The levels of micro-management you sometimes see employed just aren't necessary and lender systems just aren't that sensitive for it to achieve anything.

Pay everything on time and you'll find 99% of mortgage applications are accepted with no/few questions.

toc25

I applied with Natwest and on my statements there were large payments we made clearing a credit card over the few months leading to our application. They weren't concerned at all. Although our affordability wasn't being pushed at all we borrowed a lot less than we could have so that could have made a difference. Anything that we had cleared she marked as final payment on our statements so that the underwriter could see that was the case.