Applying for mortgage with credit card debt

soupy600

HI guys,
So nearly there with a deposit to get back on the property ladder and i know it's best to clear all debts before hand but just wondering what way lenders look at it if you have debt on a credit card? Ideally i would like to have it all paid off before hand but also really looking to stop renting and get back on the ladder.

i've currently been  working hard to pay it off  on a 0% card (£2665 at present) while saving hard for my deposit. If i still have some of this debt when i go to apply for the mortgage what is the best way to manage it? As in is there a set % or value i could reduce the card to before applying to have a better opportunity if that makes sense? Or does it not make a difference?

beth85

Hi, we’re almost ready to exchange and like you we’ve been renting for the last few years (I previously owned in the good old days before the financial crash) I’d been really nervous about getting another mortgage and put it off for years but to be honest it was really easy. I have £13k spread across 4 credit cards and a £18k car on finance (just renewed my PCP). Household income is around £70k. The debt isn’t on 0% and we’ve gone for a 90% mortgage with a high street lender.  I will add that the house we’re buying is well below our AIP offer and both credit reports are blemish free.  

MovingForwards

There is debt (current / affordable)
And
There is debt (old or unaffordable)

Yours sounds like it's affordable as it's on a 0% card.

£3k debt on £15k salary isn't positive,
£3k debt on £25k salary is ok,
£3k debt on £35 salary doesn't justify blinking your eyes.

It's all about the bigger picture.

soupy600

beth85 said:

Hi, we’re almost ready to exchange and like you we’ve been renting for the last few years (I previously owned in the good old days before the financial crash) I’d been really nervous about getting another mortgage and put it off for years but to be honest it was really easy. I have £13k spread across 4 credit cards and a £18k car on finance (just renewed my PCP). Household income is around £70k. The debt isn’t on 0% and we’ve gone for a 90% mortgage with a high street lender.  I will add that the house we’re buying is well below our AIP offer and both credit reports are blemish free.  

Thanks good to hear, good luck hope all goes well, i only have whats on my card.

soupy600

MovingForwards said:

There is debt (current / affordable)
And
There is debt (old or unaffordable)

Yours sounds like it's affordable as it's on a 0% card.

£3k debt on £15k salary isn't positive,
£3k debt on £25k salary is ok,
£3k debt on £35 salary doesn't justify blinking your eyes.

It's all about the bigger picture.

Thanks for the reply, sound like i should be ok then. Just me going for the mortgage with a salary of about £32 but done loads of overtime to boost that lately.