Purchasing on CC after Exchanging but Prior to Completion

reeceg353

I recently bought a new build and have 2 months to completion but have exchanged contracts already and paid my deposit.

I bought £80k underneath my max affordability on a mortgage and wondered if it is ok to buy things like furniture, appliances on my Credit Card, without affecting my mortgage offer? I also got a pay increase of £7.5k since my mortgage application was approved.

Reason being, I want to spread the costs onto my CC rather than applying for Store Credit, but I hear the bank does one last final check before releasing the mortgage monies? My affordability shouldn't be a problem so I don't think £4k on a credit card would affect too much, right?

Slithery

It shouldn't be a problem but why risk it?

Just wait until after you've completed.

KatieDee

We're dealing with a similar dilemma at the moment - our affordability was absolutely fine, far below what we could have borrowed, but we have very little in terms of spare cash for furniture, so interest free on the credit card made sense.

That said, it would cost us A LOT more if we were to lose the mortgage at the last minute because of a spike in our outstanding credit card debt, so I think we're going to play it safe and wait until after we've moved in (and obviously, buy cheap and secondhand where possible!).

I think the chances of it causing a lender to pull your offer is minimal, but it isn't something I'd want to gamble with.

DrSpendLittle

There was a post on here a while back where someone spent a ton of ££s on their CC's on furniture for their new house between exchange and completion. The mortgage company did a final credit check just before completion and ended up withdrawing their mortgage offer.

I'm not sure what entails a final check - someone with more knowledge will post about it I'm sure - but it may well have been an automated thing where the computer Said No on affordability grounds with the extra outstanding credit balance commitments considered. So, for you, it would take into account 3% of £4K and deduct that as a monthly commitment from your previously stated outgoings. Also, the computer won't know about your salary increase unless you have updated the mortgage company.

If I were you, I'd be super cautious. I'm not yet at exchange and I'm stressing about spending £20 the other day on my CC because I forgot my bank card. But I am a bit crazy to be fair.

Good luck with it all!

AnotherJoe

Funny, us oldsters were quite content to wait until we had the keys in our grubby mitts before getting some s/h furniture and appliances.

Todays young 'uns, at risk to their mortgage, even if only a slight risk, want to rush out months ahead and buy the latest and greatest shiny stuff.
In your case, given you are so much under the limits, you should be OK, its most probably a fuss over nothing, but why risk it?

It will make very little difference to when it arrives unless you are getting made to measure luxury sofa's and even then surely you can slum it for a few weeks.
Enjoy your new place even if you'll be sitting on a bean bag for a couple of weeks

Cakeguts

Get some furniture for cash from a charity shop or auction or even freecyle then buy new when you have lived in the house for a while and can see how much room you actually have. New houses tend to have small rooms so a great big sofa might not fit. You might not be able to get a king sized double bed in the bedroom if you don't want to have climb over it to get into it. Bedrooms and living rooms can be very small in new houses. You also need to know how to get furniture up the stairs etc. In all ways it is much better to live in a new house first before you buy furniture that won't fit in the tiny rooms.

reeceg353

Thanks for the responses.

I've read different things on different sites - best to ask my broker but he's off on holiday for 2 weeks at the mo!

I've read that they only check again if the mortgage is nearing the end of the 6 month period.. then read somewhere else that some lenders do another final check on the day before completion to make sure the borrower hasn't gone bankrupt, had any CCJs on their file since being accepted.. so only the real bad stuff.

I have a thousand left each month after all of my outgoings in regards to affordability, so hopeful it won't matter too much. I just received my P60 as well for the last year which I should probably send over to the lender and perhaps this months pay slip to prove the salary increase.

I guess long story short, have a chat with my broker and see what he says.

markin

Well it sounds like you should be able to pay cash, Or would pulling 5k out of a savings account look just as bad also?

steampowered

Is this a 0% credit card?

If not, borrowing on a credit card is an extremely expensive way to borrow. You'd basically just be holding your money over a lighter and burning it.

Socajam

reeceg353 wrote: »

Thanks for the responses.

I've read different things on different sites - best to ask my broker but he's off on holiday for 2 weeks at the mo!

I've read that they only check again if the mortgage is nearing the end of the 6 month period.. then read somewhere else that some lenders do another final check on the day before completion to make sure the borrower hasn't gone bankrupt, had any CCJs on their file since being accepted.. so only the real bad stuff.

I have a thousand left each month after all of my outgoings in regards to affordability, so hopeful it won't matter too much. I just received my P60 as well for the last year which I should probably send over to the lender and perhaps this months pay slip to prove the salary increase.

I guess long story short, have a chat with my broker and see what he says.

You have "a thousand left each month after all of my outgoings in regards to affordability" which is nice, but do you have a life happens fund and an emergency fund.
Trust me both life and emergencies happens and without some kind of back up plan, ask yourself where do you want to be - sitting on a new sofa that cannot help you.
When we moved into our new house, we had 2 rocking chairs and a TV with a coat hanger, our old bed etc..
15 years later we were mortgage free and enjoying life as it should be.
This is not to say that we did not enjoy life during that time, but our main focus was to get rid of that mortgage as early as possible.

onwards&upwards

reeceg353 wrote: »

Thanks for the responses.

I've read different things on different sites - best to ask my broker but he's off on holiday for 2 weeks at the mo!

I've read that they only check again if the mortgage is nearing the end of the 6 month period.. then read somewhere else that some lenders do another final check on the day before completion to make sure the borrower hasn't gone bankrupt, had any CCJs on their file since being accepted.. so only the real bad stuff.

I have a thousand left each month after all of my outgoings in regards to affordability, so hopeful it won't matter too much. I just received my P60 as well for the last year which I should probably send over to the lender and perhaps this months pay slip to prove the salary increase.

I guess long story short, have a chat with my broker and see what he says.

It’s a lot to gamble on ‘hopefully’ isn’t it?

You could end up legally committed to buying a house without the money to do it. How much will your new furniture comfort you in that situation?

Also 4K on a credit card is actually a lot, especially all at once and especially if the reason is to ‘spread the cost’ meaning you'll be paying interest.