Settle credit card balance before or after house sale??

anon_2019

Hi - Looking for some advice please

Me & my partner have decided that we are going to buy a house together in the next 12 months or so and are making the initial steps now to ensure we have all our ducks in a row as soon as we find the perfect property!!

I currently own a house and my partner is a first time buyer. I have around £45,000 equity in the house and a balance of around £8,500 on my credit card. I have just moved the full credit card debt to another card which has a 0% interest rate for 23 months which I am making payments of £200 a month towards as this is what is affordable.

I would like to know what the best option for me is - Would it be best to add £8,500 to my mortgage at £45 per month and pay off my credit card balance in full prior to selling the house or pay the credit card balance off as a condition of my new mortgage (if this would be acceptable to a lender????). I appreciate that I have a 0% interest rate on the credit card at the moment but wondering would it look better to the new lender on the joint mortgage if I had cleared the debt in full. The mortgage would then be settled in full upon sale ready for the new joint one so the interest payable would of course be minimal and for a short period of time.

The only way I am able to pay the credit card off in full is with the money out of the house and am worried if I don't clear it before my new joint mortgage application it will go against me and also reduce/impact on the amount we are able lend.


I wonder - Does it also look bad remortgaging and then selling my house a couple of months later?

Any advice on this would be greatly appreciated as I want to be in the strongest position possible - Thanks in advance !!!

Nebulous2

How tight are you likely to be for affordability? Your lender may be happy for you to carry over the credit card debt. I certainly wouldn't go to the bother and expense of remortgaging just before selling.

Speak to a broker and get advice based on your own circumstances.

bd10

When I recently remortgaged I had balances on my cards before I applied through a broker. Balances by which I mean: never a carry-over balance merely an amount on the card outstanding on the date of application. This had no impact on securing a new mortgage. One of my cards is with the new lender, so they see I always pay in full. I told the broker I always pay in full and they saw that from the statements, that was fine with them.

Hippyhop

Our mortgage advisor advised us to pay off our credit card as the banks multiply the outstanding amount by 4/5 X which they then deducted from the amount we were able to borrow. I would speak with a mortgage advisor if I were you. We had an excellent guy if you are based around the surrey area ��

woofdonkey

You are massively overthinking this. Just do an affordability calculation with and without the CC balance to see what kind of effect it will have. Nearer the time, get a broker's advice.

Meanwhile, pay off what you can and always pay on time.

If a lender wants you to pay off a card, they will tell you - no need to make it more complicated for yourself.