taking out a 0% credit card just before applying for a shared ownership mortgage

Rebecca5833

Hi

Me and my partner have reserved a shared ownership property, we are just about to apply for the mortgage in principal, however last week I took out a Lloyds 2 year interest free credit card not thinking it would affect our mortgage application and just seen it could. We are now very worried! Also if a lender denied us due to taking out a credit card before hand, could we pay it off and cancel the card would we be able to appeal it by doing this?

Our mortgage broker quoted us on 2 mortgages

5% deposit with Melton BSociety 5 year fixed 3.19%

10% deposit with Nationwide 5 year fixed 2.44%

We earn around £60,000 for us both so I believe we earn good income for the 25% share of the mortgage, however I am currently on furlough and just finished maternity and obviously cannot show my usual payslips and bank statements, will any of these lenders let me show also my usual payslips, and do they accept anyone on furlough? We are trying to work out which lender to give ago as we have seen if we get denied from 1 and go to the other, it will result in to many hard searches on our credit scores.

Many thanks

Rebecca

dimbo61

Well your using a mortgage broker so ask them.
They should have all your details.
Credit history, income, age, savings, etc
Now of course you have 3 factors to take into account.
New baby and child care
Furlough income and job security
Credit cards ! How much unsecured credit could you have.
It you say you have a regulate credit card spend of £500 a month on petrol, shopping, etc Why have you got 5 credit cards with a total of £25,000 available ?
So maybe cancel a few old one's or reduce the credit card limits.
Good luck on getting the home you want

dimbo61

PS I missed the 25% mortgage so not a cheap area to buy.
You have rent to pay on the other 75%
 Fewer lenders do share equity mortgages

SamJ35

Rebecca5833 said:

Also if a lender denied us due to taking out a credit card before hand, could we pay it off and cancel the card would we be able to appeal it by doing this? 

Don't think this would be possible - never heard of appealing on this basis. Paying off will make a difference - have you spent money on this card already? Is a lot of the limit used? It's mostly the application for credit that I believe is the thing that puts lenders off; once the hard check on the mortgage is done, it looks like 2 applications for credit close together. Hard to say whether it will affect it without talking to your broker though.

I'm reading that lenders are going on furlough salary basis, and only last 3 months payslips is usually what is accepted by lenders. Again, only your broker will know which lender to apply to. 

But yes, you are correct that a rejection on your credit report will have an impact on applying again.  

[Deleted User]

SamJ35 said:

But yes, you are correct that a rejection on your credit report will have an impact on applying again.  

There wouldn't be any rejection on the credit report.

Just a search.