Evidence of paying off a credit card to support mortgage application

Mikehextall

As part of our mortgage application we have been asked to provide evidence as to how we plan to clear our £5000 credit card debt before they will approve the mortgage. Let me make it clear that we have not been asked to actually clear them to zero, just how we plan to do it. Has anyone else been in this position?

firstbuyer

Not sure if this is the same situation but I recently applied and broker said my debt would be redeemed by the time of completion (around 4k).

I was then asked to prove I have the money in savings, alongside the money for deposit and this should cover it. That wasn't enough. A day after they then said they would only offer if I paid the debt off in full and proved so.

Speak to your broker / adviser and see what their opinion is as all lenders are different. Natwest underwriters have been particularly detailed from what I've experienced!

Jaywood89

NatWest did something similar to me.

I had £900 on a £3500 limit credit card which I was using each month then paying in full, each month with a £0 or max £1500 balance then paid, as a way to rebuild a good repayment history. They wouldn’t move to offer stage till I proved the amount was £0 which I felt was abit silly as I could prove the card was paid in full each month and had been for 6 months. I cleared it to £0 for the sake of argument and then moved to the offer stage.

They hadn’t mentioned the credit card as an issue until the last minute which was very frustrating as I imagine it is for you at the moment.

Thrugelmir

Been a gradual tightening of lending criteria in the last quarter. No doubt in reponse to the BOE's comments that interest rates may rise than previously suggested. (Only marginal rises at a time but on a more frequent basis).

firstbuyer

Curious though - If i use my credit card from now until completion (but pay it off in full each month) is that OK?

[Deleted User]

Yes. .