affordability

yellow218

Looking to move house. Having done some online comparisions, I can see what we can 'potentially borrow', but it is all subject to the affordability check. (when running it through my own thorough household budget the monthly payments seem fine to me)


Wanting to double check what is taken into account. The obvious, salary, mortgage, essential outgoings, debt.


1)Are savings is also taken into account? Ie we stooze. so we have a fair amount on credit cards, but it is offset by savings.


2) But if savings are not considered, they it might look like we couldn't borrow any more. so I could pay them off now, how long would it take after paying it off to then improve the affordability check?


If savings are considered, then id prefer to keep the money in the bank and make interest.


Not sure what is the right way to go- any thoughts?

foxy-stoat

Pay your credit cards off and wait a month for your credit history to update.

Having big credit cards balances and savings will put you in a worse position than no credit card balances and less savings.

Nebulous2

I was in the same position last year. Had around £30k stoozed. Went to visit Nationwide informally and they told me what I needed to do, which was reduce it to under £10k. I did and our application sailed through.

yellow218

Can I ask how long it took after you reduced the debt?

Mortgage broker seems to think it’ll be find if we provide evidence of the savings used to offset it.

Nebulous2

yellow218 wrote: »

Can I ask how long it took after you reduced the debt?

Mortgage broker seems to think it’ll be find if we provide evidence of the savings used to offset it.

I waited until it had changed on my credit reports - took about 6 weeks. If I remember correctly during my full application by phone I was asked what was the highest level my credit cards had been in the last 4 weeks.

The reason I waited was that in my informal visit to my local branch the manager / adviser I spoke to said if the figure I gave and the amount their search showed weren't the same it would be an automatic decline and I'd have to appeal.

I couldn't be bothered with all of that, so just waited.

kingstreet

Which lender are you using?

AnotherJoe

Given the very low returns from stoozing and the difficulty of persuading automated systems that your £30k debt isn't really a debt because you have £40k elsewhere*, I suggest you pay them off and give it a rest until your mortgage is established and your new payment regime settled.

* there are posters here who have sworn blind they have done a great job saving (say) £40k for a deposit even though £30k or even £50k is owed on cards and other loan debt