Deposit from credit card money transfer

firsttimespender

Hi all, I’m a first time buyer just starting to look at houses. I think I’ve done something a bit silly and looking for reassurance (hopefully!) or advice on how to unwind if that’s what I need to do. 

My problem is that I was impatient to fully fund my LISA this year and part of my contribution (£1800) came from a 0% interest money transfer from my credit card. This isn’t a cash advance, but the transfer into a bank account - like a balance transfer but money. The credit card is with Virgin. The rest of my LISA contributions this year were from my salary. 

I’ve now got an approval in principle but know I’ll need to show at some point the source of the deposit. On the LISA statement it just shows as an £1800 contribution which is 2-3 times the size of any other contributions. On my current account bank statements it shows as a transfer in from myself. There wasn’t much gap between the money transfer (£3000 with some of it clearing an overdraft) and the LISA contribution so it’s clear that’s what I did although I suppose technically I could say I contributed my own money to the LISA and used the money transfer to pay for living costs. 

Is this going to be a major problem for me? I am of course declaring the outstanding credit card balance which is £7000 all together. I’m paying this off slowly at the moment as still saving for purchase and moving and it’s on 0%. If it would be a problem the only thing I can think of to do would be to pay off the full balance of the card which I could do in 5-6 months if I directed money there instead of to saving towards a move. Then I’d be ‘clear’ and all the money in my deposit would be from me in effect.

I’d be grateful for any advice from the knowledgeable people on the board! Please be nice to me as I already know it was a stupid thing to do and am kicking myself. 

london21

You will have to disclose the credit card balance. The bank will take it into consideration.

if you can pay it off then that’s also an option. 

JJG1984

Did you declare £7000 credit card debt when you applied for your decision in principle?

if you did then your application should continue without too many issues 

Pow11890

They’ll be able To see it on your credit report 

aoleks

They’ll see the outstanding balance, but you won’t have to prove every single transaction. That £1800 is nothing in the grand scheme of things, no one will bat an eye…

ACG

This is one of those things that may not get picked up, but if it does its likely to be a problem.
There is only one lender I know of who will accept a loan (or I suppose in effect a credit card) as a form of deposit. 

firsttimespender

Thanks everyone it’s been helpful to read these thoughts. I have declared the credit card debt when I applied for the approval in principle, but I didn’t say that part of it was a money transfer (the rest is balance transfer, originally it was consumer debt). 

Thanks @ACG - really helpful to have a mortgage adviser’s view. If it is a problem would I be able to not use my full LISA and replace that part of the deposit with cash? For example if the deposit amount is £12,000 use £8,000 from my £10,000 LISA (so not using the £1,800 credit card transfer amount - I know this works out to a little more than £2,000 with the bonus, but rounded for ease!) and add £4,000 cash?