Moving home.. clear credit cards?

hoponhiggo

Afternoon all...

Just after some advice. My wife and I are looking to sell our home and buy a bigger house in a nicer area, so obviously some extra lending will be required.

Unfortunately, my wife and I have acrewed a number of debts over credit cards over the years, and while we can manage those debts, it's makes extra lending a bit of a pain.

I've done the maths, and have worked out that if we sell our house for its estimated value, we could use the funds to clear whats left of our current mortgage, clear all of our credit cards and still have a bit more than the 10% deposit required to take out the new mortgage.

My question is...in the eyes of the mortgage lenders, would this go against us in the lending criteria? Or would it be seen as a positive?

I can't decide if they will like the fact that we have cleared debts, or hate the fact that we have acrewed the debts in the first place and had to sell our house in order to clear them?

amnblog

Most won't care either way as long as it is affordable.

The only thing you need to watch is that some lenders include the debt against your affordability even if you do intend to repay the cards as part of the moving process.

hoponhiggo

Many thanks for the quick reply.

I have spoken to the Halifax who have given me a mortgage 'promise' with affordability for both with or without the credit cards cleared.

From previous experience, knowing exactly what a promise from the Halifax is worth, I am worried that I will sell my house, go ahead and clear the debts, and then be told by the Halifax that 'computer says no'

amnblog

Dont know why you have that impression. That is very rarely what’s happens.