Engagement and Mortgage

Withasilentt

I'm planning on proposing to my partner and have bought a ring on my credit card however we are also plan on trying to buy a property in the near future. Would I be better paying off the credit card IN FULL with money I've been saving for my part of the mortgage deposit therefore reducing deposit amount or doing a balance transfer to one of my other cards which has 0% interest on balance transfer for 12-18 months and pay it off in smaller installments? That way I would still have a larger amount of savings right now to use for mortgage deposit or would the fact that I've increased my credit utilisation (would still be under 30%) reduce my chances of getting a mortgage? I normally pay off IN FULL but this is a larger purchase than normal.

yksi

We would need to know more about your credit history to say. What sort of amount is on the CC, what deposit will you have either way for a property, and what kind of property price are we talking, and what kind of salaries?

Most people seem to agree that lenders prefer to see that you haven't got much credit card debt even though this might leave you with only a 10% balance instead. While lenders CAN see that it's a promotional CC which explains only paying off minimums, it's a double-edged sword, because they will also be aware that if you don't pay it off in time you'll be slammed with high interest, plus you're not showing you can get rid of debts easily. Low usage and paying down quickly looks better. For most people a CC debt will not prevent a mortgage, but if paying it off will still leave you with a decent deposit and no struggles with affordability, that's probably a better option. Remember that mortgage affordability is decided by the banks, not you - do an online mortgage calculator or three.

[Deleted User]

Stick it in to online calculators and see the difference.  If your incomes are good then a bit of credit card debt doesn't hurt usually.  

Mitzj7374

Withasilentt said:

I'm planning on proposing to my partner and have bought a ring on my credit card however we are also plan on trying to buy a property in the near future. Would I be better paying off the credit card IN FULL with money I've been saving for my part of the mortgage deposit therefore reducing deposit amount or doing a balance transfer to one of my other cards which has 0% interest on balance transfer for 12-18 months and pay it off in smaller installments? That way I would still have a larger amount of savings right now to use for mortgage deposit or would the fact that I've increased my credit utilisation (would still be under 30%) reduce my chances of getting a mortgage? I normally pay off IN FULL but this is a larger purchase than normal.

Why did you buy a ring that would put you in debt? I doubt she would know the difference in rings; how much did you spend? 

Withasilentt

Mitzj7374 said:

Withasilentt said:

I'm planning on proposing to my partner and have bought a ring on my credit card however we are also plan on trying to buy a property in the near future. Would I be better paying off the credit card IN FULL with money I've been saving for my part of the mortgage deposit therefore reducing deposit amount or doing a balance transfer to one of my other cards which has 0% interest on balance transfer for 12-18 months and pay it off in smaller installments? That way I would still have a larger amount of savings right now to use for mortgage deposit or would the fact that I've increased my credit utilisation (would still be under 30%) reduce my chances of getting a mortgage? I normally pay off IN FULL but this is a larger purchase than normal.

Why did you buy a ring that would put you in debt? I doubt she would know the difference in rings; how much did you spend? 

Has not put me in debt mate. I can pay it off in full if I wanted with some of my savings however thought it might be better to keep me savings to put toward mortgage deposit and pay off ring cost over 0% period on Balance Transfer 

Mitzj7374

Pay the ring off, it may affect interest rate etc 

Mitzj7374

How much was the ring?