Financial Dependants

Smellyonion

WhenIam64 wrote: »

If you look at the arithmetic around affordability. Paying 10,000 at and APR of 30% is completely different paying the same 10,000 at an APR of 5% in terms of monthly outgoings / affordability. So by adding in the mortgage debt has gone up but outgoings are the same.

The risk here is that the affordability calculation is somewhat skewed if the CC debt is ongoing spending which has not been curtailed. In the OP's case, his CC debt was a one-off from separation.

I am still not quite on board. You are suggesting that the bank may treat the CC debt as a recurring spend? That is the only way I could see it affecting affordability.


Most lenders do not ask or know what % the credit card debt is at.

enthusiasticsaver

How much is the credit card and how much do you have saved for a deposit, fees etc for moving house?

Whilst I understand the issue around mortgages and affordability and deducting debt repayments when deciding the maximum to lend you I would be uncomfortable moving debt from a credit card to a loan especially if the credit card is at 0%. If it is not then why not and if you have a bad credit record you will not get a decent mortgage rate either?

Setting aside the issue of a potential new mortgage how long have you had credit card debt?

Moving credit card debt to a loan is more expensive and usually takes longer to repay. The best way to deal with debt on a credit card is get a 0% deal and pay it off within the initial deal period or second best option balance transfer it at the end of the deal.

Moving credit card debt to a loan will mean you have to pay interest and often is repaid over a longer period so will cost you even more. It also means the reasons why you got into debt on credit cards are not addressed, you feel you have dealt with it and relax your spending and build up more debt on the now clear credit card. Before long most people have doubled their debt as they now have a long term loan plus more credit card debt. Don't fall into the trap.

The answer to your initial question is yes your children are financial dependants even if they do not live with you. You are still responsible for child maintenance to the parent in residence which you say you pay so that will be another consideration with affordability.