Switching credit card debt before mortgage application

Melziejane

So we're looking to apply for a mortgage in 9 - 12 months time. We have a credit card debt that is now acquiring hefty interest. We would like to shift this debt to a 0% interest credit card however I'm concerned how this will affect our chances of getting a mortgage with a recent credit application. 
Do we stick it out on the original credit card and pay the monthly payments until after we have a mortgage or switch now and hope it doesn't impact our mortgage application? 

Thrugelmir

Debt is debt wherever you switch it too. Reducing the interest you pay should remain the immediate priority.  Lenders aren't going to be concerned with who you owe. 

Melziejane

Thrugelmir said:

Debt is debt wherever you switch it too. Reducing the interest you pay should remain the immediate priority.  Lenders aren't going to be concerned with who you owe. 

It being a "recent credit application" concerns me. 

cymruchris

Melziejane said:

Thrugelmir said:

Debt is debt wherever you switch it too. Reducing the interest you pay should remain the immediate priority.  Lenders aren't going to be concerned with who you owe. 

It being a "recent credit application" concerns me. 

I think lenders would be more worried that debt isn't reducing over a period than a single credit search. Do you have a plan to get the balance down as much as possible before the mortgage application? How will you manage any 'emergencies' or additional costs during the house buying process - what's your contingency plan?

K_S

Melziejane said:

So we're looking to apply for a mortgage in 9 - 12 months time. We have a credit card debt that is now acquiring hefty interest. We would like to shift this debt to a 0% interest credit card however I'm concerned how this will affect our chances of getting a mortgage with a recent credit application. 
Do we stick it out on the original credit card and pay the monthly payments until after we have a mortgage or switch now and hope it doesn't impact our mortgage application? 

@melziejane Unless you're looking to apply for a mortgage within a couple of weeks of the credit card, I would not expect the hard-check to have a huge impact.

Importantly, when transferring balances, the credit report can often shown balances on both cards for a period of time, due to the different time lags involved in updating the report. That can trip up a DIP (decision/agreement in principle) because the system may count the debt twice. I hope that makes sense.

But to summarise, if you're only looking to apply in 9+ months, none of the above is likely to apply and you should indeed focus on reducing the interest cost of your debt.

penners324

Get the debt paid off (even from the deposit you have)

Melziejane

cymruchris said:

Melziejane said:

Thrugelmir said:

Debt is debt wherever you switch it too. Reducing the interest you pay should remain the immediate priority.  Lenders aren't going to be concerned with who you owe. 

It being a "recent credit application" concerns me. 

I think lenders would be more worried that debt isn't reducing over a period than a single credit search. Do you have a plan to get the balance down as much as possible before the mortgage application? How will you manage any 'emergencies' or additional costs during the house buying process - what's your contingency plan?

Fortunately our finances have changed for the better so our plan was to start throwing some extra money at the cc debt. Obviously this would be better interest free but at the same time didn't want anything like new credit hampering our chances. 

Melziejane

K_S said:

Melziejane said:

So we're looking to apply for a mortgage in 9 - 12 months time. We have a credit card debt that is now acquiring hefty interest. We would like to shift this debt to a 0% interest credit card however I'm concerned how this will affect our chances of getting a mortgage with a recent credit application. 
Do we stick it out on the original credit card and pay the monthly payments until after we have a mortgage or switch now and hope it doesn't impact our mortgage application? 

@melziejane Unless you're looking to apply for a mortgage within a couple of weeks of the credit card, I would not expect the hard-check to have a huge impact.

Importantly, when transferring balances, the credit report can often shown balances on both cards for a period of time, due to the different time lags involved in updating the report. That can trip up a DIP (decision/agreement in principle) because the system may count the debt twice. I hope that makes sense.

But to summarise, if you're only looking to apply in 9+ months, none of the above is likely to apply and you should indeed focus on reducing the interest cost of your debt.

I was hoping that would be the case. We're now in a position to start clearing the cc debt and obviously a lot better if it interest free. 

SuseOrm

Melziejane said:

Thrugelmir said:

Debt is debt wherever you switch it too. Reducing the interest you pay should remain the immediate priority.  Lenders aren't going to be concerned with who you owe. 

It being a "recent credit application" concerns me. 

I actually foolishly opened a credit card I haven’t even used the bloody thing but apparently it is affecting my credit rating for six months.  I did get a mortgage but I didn’t get the rates that I should’ve