Taking out credit after mortgage offer

LavenderLamb101

Hi,
Hypothetical question, can I take out a loan / credit card after a formal mortgage offer? Can they then refuse the offer if they find out?
Thanks

MovingForwards

Yes.

That's why it's always said not to apply for ANY credit, even 0%, buy now pay later etc as it's not worth the risk.

Within the offer T&C's will be a clause about notifying the lender of any changes to your circumstances.

dunstonh

can I take out a loan / credit card after a formal mortgage offer?

yes

Can they then refuse the offer if they find out?

yes.

Basically, you shouldn't take more credit out until you are in the house and have the keys.  And seeing as many people underestimate the spending needs when buying a house for the first time, they should avoid taking any credit out for the first 12 months to be on the safe sife. (subject to personal circumstances)

LavenderLamb101

Thanks for the replies, so once you have the keys you are free to do as you wish?

MovingForwards

Yes, keys in hand it's all done. Only problem you will find is the delay getting onto the electoral roll which makes electronic identification impossible, you will need 'paper' based ID to prove your new address. So prioritise registering for council tax and updating your existing bank accounts so you can download proof of address.

ACG

When we set up our customers on our back office system, it sends out an automated email. In that email it says:

Important Notes:

• Please do not apply for any new credit (this includes Balance Transfers) until your Mortgage has completed. 
• You must carry on paying your commitments even where we are consolidating the debt until you have confirmation they have been paid off. 

Lenders may do additional checks before releasing the money but even if not, you have ot make them aware of any changes to your circumstances prior to completion - which would include new debts. 

upthegarry

ACG said:

When we set up our customers on our back office system, it sends out an automated email. In that email it says:

Important Notes:

• Please do not apply for any new credit (this includes Balance Transfers) until your Mortgage has completed. 
• You must carry on paying your commitments even where we are consolidating the debt until you have confirmation they have been paid off. 

Lenders may do additional checks before releasing the money but even if not, you have ot make them aware of any changes to your circumstances prior to completion - which would include new debts. 

Would the same be said if you used your current credit card you have between offer and completion - say you spent £200. 

ACG

I have known lenders to reduce the mortgage where credit cards are higher than they were at the time of application, but they had gone up by a fair bit more than £200.  I suppose the safe answer would be to not run up any balances beyond what they were. But I know some people have credit cards they clear in full each month so they may do a credit check tomorrow and it be £0 and then in 2 weeks be a grand but then 2 weeks later be back down to £0. 

I cant imagine £200 being a massive issue, but I dont know where the cut off point is.