If you have taken out credit after mortgage offer

AAGG1234

Dear people that may have done this

This thread is to summarise all points made in all forums on MSE and to hopefully offer more perspective. I’m assuming there is no CCJ/bankrupt issues/late payments as offer has been given and you won’t be silly enough to miss payment as your offer will
more than likely be withdrawn.

Getting new bank account or utility supplier ;
Your credit score may drop due to new account opening but believe me when I say this, this will not effect you if final credit check is done. So don’t stress about this.

Getting new credit card;
If final credit check is done before completion, this is really at lender discretion. Some lenders view this as a negative and can add 3-5% of available balance as a commitment which will affect the amount lender can offer you. Go to the lenders affordability calculator and add commitment in. If the results show your within level of lending, then good. If not, it could pose issue and would advise to close card. Other lenders will not look so much into it so long as you don’t go on spending spree before completion and build up credit utilisation above 25% which will appear on your credit report. Also having a good credit card record and making full payments every month will help you. But if you don’t pay your cards in full on time, rather slowly, and get extra credit, that would not be show you in positive light.

New hire purchase or finance;
This is biggest issue. Assuming all lenders do credit check before completion and going back to above, use lenders affordability calculator to see if the commitment takes you below amount the lender will give you. If it goes below, I would look for ways to close it ASAP. Return within 14 days? Or selling on? Rare occasions mortgage may be withdrawn because of this but assume you will be checked and if affordability calculator goes below what lender would offer you with commitment, expect an amended offer.

I hope this helps with anyone in this position. I talk from experience as I was in similar situation.

A lot of people on forum will say don’t try to get any credit before completion which is best advice but if you do mistake of getting any sort of credit pre completion, do affordability check again and correct position if needed it. Don’t take risk of potential credit check before completion and having a big headache.

Good luck on your future purchase.

GMac14

Hi, excellent advice but I have a question regarding cash deposits.

We are about 4 weeks away from completion on a HTB property with mortgage with Barclays. We have provided bank statement to show part deposit and £5k gifting letter from parents and then that amount paid in with total paid to solicitor of £9k, agreed to pay balance of deposit of £1,500 on completion which will come from my wages.  However, in the meantime a good friend has offered me £2k to help with carpets etc, being uncomfortable having the cash in the house I have paid in £1k into my Barclays account and ideally looking to pay in the other £1k into the bank, but is there any reason to worry about not being able to show where this money came from?  Previous advice from my Mortgage Broker was "dont breathe" as in dont take on any extra credit or spend more than usual on credit cards (£50 per month on fuel), hoping the dont breathe comment doesn't apply to depositing more money?

davidmcn

GMac14 said:

Hi, excellent advice but I have a question regarding cash deposits.

That's got nothing to do with the advice above about credit records - you'd be better to start your own thread.

debtfreeian

Serious question. Do lenders re-score prior to completion after an offer has been made? I find that hard to believe. What if you exchange and are legally obliged to purchase the property and the mortgage is pulled. Are they going to go back to underwriting?

[Deleted User]

debtfreeian said:

Serious question. Do lenders re-score prior to completion after an offer has been made? I find that hard to believe. What if you exchange and are legally obliged to purchase the property and the mortgage is pulled. Are they going to go back to underwriting?

Some lenders may re score. It does not matter if you’ve signed contracts, it’s the bank or building societies money and they can do what they like when they like with it. 

Between offer and completion don’t take out credit just to be on the safe side