Applying for Balance Transfer During Mortgage Application?

Ktboo93

Looking for a bit of advice here - please be kind!

My Barclay's credit card is coming close to the end of it's 0% interest free period. I currently have £1000 remaining on it which I cannot pay in full. My partner and I have recently been accepted for a Mortgage with Natwest on our first property. We wont be exchanging contracts until after the 0% interest free period is up. Our broker said to not apply for any new credit unless absolutely necessary as Natwest could do a final check before exchange and cancel the Mortgage.

I thin I could cover the interest payments up until we exchange - am I then able to apply for a 0% Balance Transfer card? What are my other options?

Any advice appreciated. Thanks  

[Deleted User]

With only £1k to go, it isn't worth the risk of another credit application. Definitely do not apply for anything between exchange and completion.

Just try to get it paid off a quickly as you can.

Ebe_Scrooge

Your broker is correct - the general advice is never to apply for any new credit product in the run-up to a mortgage.  It's probably unlikely that they'd cancel the mortgage application, but is it really worth risking it - especially for such a relatively low amount of debt?

Either way, there's no guarantee you'd be accepted for a balance transfer card anyway - lenders have tightened up their criteria considerably since Covid hit.

Ktboo93 said:

What are my other options?

Do you have savings that you were planning on using for "nice" (as opposed to essential) things for the new house.  If so, it would be eminently sensible to use that to pay off the card in full, then just save up for a few months to buy the stuff you wanted.  Not only will you save yourself the interest charges, you'll also start life in your new house without the debt nagging in the back of your mind - that's got to be a bonus

Ktboo93

Ebe_Scrooge said:

Your broker is correct - the general advice is never to apply for any new credit product in the run-up to a mortgage.  It's probably unlikely that they'd cancel the mortgage application, but is it really worth risking it - especially for such a relatively low amount of debt?

Either way, there's no guarantee you'd be accepted for a balance transfer card anyway - lenders have tightened up their criteria considerably since Covid hit.

Ktboo93 said:

What are my other options?

Do you have savings that you were planning on using for "nice" (as opposed to essential) things for the new house.  If so, it would be eminently sensible to use that to pay off the card in full, then just save up for a few months to buy the stuff you wanted.  Not only will you save yourself the interest charges, you'll also start life in your new house without the debt nagging in the back of your mind - that's got to be a bonus

Thank you Unfortunately the savings I have will go on flooring (new build property without flooring included!). Am I correct in thinking that I could take a hit and pay the intrest charges until we are in the house and then once we've exchanged and are in I could apply for a 0% balance transfer card with the hope that I get accepted, or can you only apply for a 0% balance transfer card when you are in your 0% interest period?

Hope that makes sense! 

Ebe_Scrooge

Ktboo93 said:

Ebe_Scrooge said:

Your broker is correct - the general advice is never to apply for any new credit product in the run-up to a mortgage.  It's probably unlikely that they'd cancel the mortgage application, but is it really worth risking it - especially for such a relatively low amount of debt?

Either way, there's no guarantee you'd be accepted for a balance transfer card anyway - lenders have tightened up their criteria considerably since Covid hit.

Ktboo93 said:

What are my other options?

Do you have savings that you were planning on using for "nice" (as opposed to essential) things for the new house.  If so, it would be eminently sensible to use that to pay off the card in full, then just save up for a few months to buy the stuff you wanted.  Not only will you save yourself the interest charges, you'll also start life in your new house without the debt nagging in the back of your mind - that's got to be a bonus

Am I correct in thinking that I could take a hit and pay the intrest charges until we are in the house and then once we've exchanged and are in I could apply for a 0% balance transfer card with the hope that I get accepted, or can you only apply for a 0% balance transfer card when you are in your 0% interest period?

Hope that makes sense! 

Yes, you can apply for whatever you like once everything to do with the house purchase is safely completed.  And you can apply for a BT card at any point - arguably it makes sense to wait until your current BT is about to/has expired, to make the most of the interest-free period.  Do bear in mind though - the lender's affordability checks will take into account your new mortgage, so you may find you struggle to get accepted for the best/any deals.  No harm in making one application, though.

Just as an aside - and this is in no way mean to come across as "having a dig" - but this is why my advice on BT cards always ends with "Make sure you have plans in place to clear the balance at the end of the promotional period, as there's no way you can guarantee you'll be able to do another BT".  Like I say, that's not meant to be nasty - just something to bear in mind for the future.

Sandtree

You are more likely to be accepted for a new BT deal now however in doing so you risk losing your mortgage offer.

Ktboo93 said:

I think I could cover the interest payments up until we exchange - am I then able to apply for a 0% Balance Transfer card? 

To be honest that is an exceptionally worrying statement that your finances are so finely balanced that you only "think" you can cover another £20 a month... what if you dont get a new 0% card? What happens later in the year when your fuel bills jump up another £50 a month?

I'm a little surprised that you've passed the affordability tests with such little disposable income.

Ktboo93

Sandtree said:

You are more likely to be accepted for a new BT deal now however in doing so you risk losing your mortgage offer.

Ktboo93 said:

I think I could cover the interest payments up until we exchange - am I then able to apply for a 0% Balance Transfer card? 

To be honest that is an exceptionally worrying statement that your finances are so finely balanced that you only "think" you can cover another £20 a month... what if you dont get a new 0% card? What happens later in the year when your fuel bills jump up another £50 a month?

I'm a little surprised that you've passed the affordability tests with such little disposable income.

Sandtree said:

You are more likely to be accepted for a new BT deal now however in doing so you risk losing your mortgage offer.

Ktboo93 said:

I think I could cover the interest payments up until we exchange - am I then able to apply for a 0% Balance Transfer card? 

To be honest that is an exceptionally worrying statement that your finances are so finely balanced that you only "think" you can cover another £20 a month... what if you dont get a new 0% card? What happens later in the year when your fuel bills jump up another £50 a month?

I'm a little surprised that you've passed the affordability tests with such little disposable income.

Ah. There’s always one patronising response! I admit it was poor phrasing  on my part. I can cover the extra £20 a month in interest. No need to be so patronising in your response! 

Ktboo93

Ebe_Scrooge said:

Ktboo93 said:

Ebe_Scrooge said:

Your broker is correct - the general advice is never to apply for any new credit product in the run-up to a mortgage.  It's probably unlikely that they'd cancel the mortgage application, but is it really worth risking it - especially for such a relatively low amount of debt?

Either way, there's no guarantee you'd be accepted for a balance transfer card anyway - lenders have tightened up their criteria considerably since Covid hit.

Ktboo93 said:

What are my other options?

Do you have savings that you were planning on using for "nice" (as opposed to essential) things for the new house.  If so, it would be eminently sensible to use that to pay off the card in full, then just save up for a few months to buy the stuff you wanted.  Not only will you save yourself the interest charges, you'll also start life in your new house without the debt nagging in the back of your mind - that's got to be a bonus

Am I correct in thinking that I could take a hit and pay the intrest charges until we are in the house and then once we've exchanged and are in I could apply for a 0% balance transfer card with the hope that I get accepted, or can you only apply for a 0% balance transfer card when you are in your 0% interest period?

Hope that makes sense! 

Yes, you can apply for whatever you like once everything to do with the house purchase is safely completed.  And you can apply for a BT card at any point - arguably it makes sense to wait until your current BT is about to/has expired, to make the most of the interest-free period.  Do bear in mind though - the lender's affordability checks will take into account your new mortgage, so you may find you struggle to get accepted for the best/any deals.  No harm in making one application, though.

Just as an aside - and this is in no way mean to come across as "having a dig" - but this is why my advice on BT cards always ends with "Make sure you have plans in place to clear the balance at the end of the promotional period, as there's no way you can guarantee you'll be able to do another BT".  Like I say, that's not meant to be nasty - just something to bear in mind for the future.

This is super helpful thank you! 

Sncjw

I would wait until you have fully completed rather than wait until after exchange. 

Grumpy_chap

Ktboo93 said:

 Our broker said to not apply for any new credit

Follow the advice of your Broker

martinbainbridge1975

I would wait until your mortgage is accepted and apply when you have the mortgage offer in writing - at this point look for a combined 0 per cent balance transfer and purchase card then make sure you close down the current card