Help Please

Jewsonlad

Hi everyone,

I am looking to move house soon but have a few thousand pounds of credit card debt. How will this affect me applying for a larger mortgage? I am thinking of getting a loan to pay the cards off and get rid of them but not sure if it's the right thing to do to apply for a loan just before applying for a new mortgage. Any advice greatly appreciated

[Deleted User]

It very much depends on the detail.

Eg How much do you owe, what rates, when you intend to apply for the mortgage, likelihood of acceptance for further borrowing.

Ebe_Scrooge

As per the above, it depends. No one can say for certain how it will affect your mortgage application - quite apart from anything else, each lender will have their own, different, criteria.

On the face of it, I'd be inclined to say you're better off leaving things as they stand. Thinking about it logically, if you are accepted for a loan and use this to pay off your cards, your amount of outstanding debt is still the same - which is one factor that a lender will look at.

You may not be accepted for a loan anyway - although you intend to pay off the cards, a lender can't be sure you will actually do this, so they'll work on the assumption that you're doubling your debt.

If you do get accepted for a loan, you're going to have only a short history of repaying that loan by the time you come to getting your mortgage. Presumably you've been paying off the cards regularly for some time, so that in itself is seen as a favourable marker on your file. Yes, ideally you'd want to be carrying very little - or no - debt. But as long as you've been servicing the debt with no issues, missed or late payments etc., then that in itself shouldn't be a major issue.

So on balance I'd say leave it as it is. Obviously, if you're able to go all out to pay down the existing debt before you apply for the mortgage, that will go in your favour. But I don't think there's anything to be gained from taking out a new loan.

DCFC79

Cant think of anything else to add here OP, its all been covered.