Part Payment of House with 0% Interest Credit Card.

Nebulous2

lcc86 said:

Why don't you look into whether a 5k mortgage has less interest than the fee for a money transfer? Interest rates are really low right now and you'd probably get a bit longer to pay it if you went for a 3 or 5 year deal. It doesn't sound like you've found a property yet so I'm confused as to how you know how much you need to borrow. If it's "only" 5k could you not save up instead? 

Mortgages have a lower limit, possibly £25,000, depending on the lender. If the op wants to avoid paying interest and wants advice, we need to run with that, rather than question him. 

Nebulous2

BucketFull said:

Hi all.

I have a few more questions regarding my query.

I hope this is not a stupid question, but regarding the 0% credit card with money transfer option, can the card be from the same bank as the bank account which the money is going to be transferred into?

How long does the process take from the time of application to the bank account being credited?

As mentioned already, I would like to start paying back the money in four months' time. What would be the best way to go about this? Should I apply now just to check if my application would be accepted or not and then apply again in four months' time so that I know if I've got any chance of being successful and can plan accordingly?

My solicitor states that the money for purchasing a house needs to be in my account for at least six months for money laundering reasons. Would the credit card money transfer option be exempt from this rule since there will be the bank's own evidence that the money has come from them?

Thanks you for any advice.

Yes the credit card can be from the same bank. In fact your own bank may be more likely to offer you a card, if you don’t have much of a credit history. 

It it can be credited very quickly, possibly 10 days from applying for a card, though I don’t have any experience of applying in Covid times. 

You need to make at at least the minimum payment every month, which varies slightly from  card to card, but effectively you need to start paying a month or so after getting the money. 


You you need to ask him or her. They have a duty to ensure you aren’t money laundering and how they do that is to some extent up to them. 

eddddy

BucketFull said:

My solicitor states that the money for purchasing a house needs to be in my account for at least six months for money laundering reasons. Would the credit card money transfer option be exempt from this rule since there will be the bank's own evidence that the money has come from them?

I suspect that the solicitor means that if money has been in your account for at lest 6 months, no further investigation will be necessary.

But if money has been in your account for less than 6 months, you'd have to show the solicitor where it came from. I would think a credit card statement showing a money transfer from your credit card, and a bank statement showing a matching credit in your bank account would be sufficient.  But it's up to your solicitor's AML department to decide what's acceptable.

(However, £5k would be a big credit limit. You might not be offered that much by the credit card company straight away.)

Sandtree

They will need to confirm its source, my deposit was in my account for about 10 minutes but was easy to show it was a dividends payment from my company. If its been there longer they care less.

Assuming you are purely a cash buyer then there are various ways of getting cash off of a credit card with varying levels of fees involved. If you are going to be getting a mortgage and the cash is only going towards the deposit then you'll have more problems as mortgage providers generally wont consider any funds raised by new debt towards the LTV calculation.

BucketFull

Thanks for the helpful advice.

lcc86, the third paragraph of my post at 17 January at 10:04PM answers your most recent query also.

I'm still a little unclear regarding my question about applying for the card/credit. Is it possible to apply now only to check to see whether or not I would be successful and if so, to know the amount they would be crediting, so that I know whether or not I can rely on receiving the amount in four month's time when I apply for real? For example, during the process, would I be given the opportunity to accept or cancel going ahead with the transaction or is it a case of their issuing the credit automatically if the application is successful?

I have another two questions for which any info would be appreciated.

Is the entire application process conducted via a form only or is there an opportunity to speak to someone also to explain anything that would help with the application?

Is it beneficial if I haven't used a credit card before (and so, would not have any adverse results in this area) or is it better if there is a credit card history of transactions without any issues with repaying?

Thanks.

Sandtree

Some lenders offer a soft search option where they give you an indication of if they'll accept you or not without impacting your credit history. How much detail they give and how accurate the indication is does vary by lender.

You can do a full application which will give you a definitive answer but will leave a mark on your credit history and that will impact other lenders decisions. If its straight through acceptance they will give you the details and you do effectively have to accept their offer. Lenders will hold the offer open for a while (more likely 28 days) after which its retracted and you'd apply again. If the application goes to referral then it does vary in my experience, some will make and offer that you can accept or decline within 28 days and others will simply issue the card if they review and accept the application.

Most applications are done by filling in a form online, with most banks you can do it over the phone but all the person at the other end is doing is typing the details into the same form for you... the only difference is by phone you will have to give a physical signature to accept the offer whereas online its clicking a button to agree.  There is no opportunity to "explain anything", they are data entry clerks not underwriters.

It is better to have proven history of being able to manage debt responsibly than to have no history.

northwalesd

A soft search, with an indication of acceptance, done now is no guarantee that you will be offered the card when you do a full  application in the future. So no, you can't rely on anything in four months time.

MrFrugalFever

Forgive me if I am missing something and perhaps misunderstanding you but if you’ve managed to raise enough funds to purchase a property outright except for a possible £5,000 then surely to get the amount of money required to outright purchase a house there has to be more to what you’re eluding to? It would appear that £5,000 could be well within your reach to attain without the use of a credit card, unless the money you’ve received has been a windfall?

yksi

I used a 3% fee money transfer to get the money for my solicitor's fees, decorating supplies and moving costs. I was also buying without a mortgage. A week later my bank gave me a personal loan anyway and I used that to repay the credit card. And that meant I was able to answer truthfully that it was for refinancing debt. 

Ideally you would be getting a mortgage I suppose, but there are reasons some of us can't get them including that banks tend to have minimums of somewhere around 30k. 

BucketFull

Thanks for all the helpful advice.

I think it sounds like applying just one time in four months' time may be the most sensible option. I will wait.

Unfortunately, a personal loan would involve interest also, so I would be avoiding that option.

MrFrugalFever, please see paragraph 4 of my post on 17 January at 10:04PM. £5,000 may be pocket money for some or easily/quickly attainable for some, but it is the maximum amount I can save in a year under ideal circumstances.

Thanks everyone.