Mortgage conditions credit card paid off

slwj89

Hi.

we have recently had our mortgage offer through, just about to exchange, completion won’t be till June as it’s a new build. 

When having a phone conversation (security check)with the lender before offer, it was thrown into the midst about paying off a credit card before completion, this credit card has a balance off 1300, so we can pay this off, but on our offer conditions it doesn’t mention about the credit card being paid off?

has anyone had experience of this?

Markneath

If it needs to be paid off, then clear it and use the card for your following months expenses.

Are you borrowing close to your lending limit on the mortgage?

My guess is if the monthly c/c payment is £50 this would reduce what you can borrow by about £2700 just an example.

slwj89

Markneath said:

If it needs to be paid off, then clear it and use the card for your following months expenses.

Are you borrowing close to your lending limit on the mortgage?

My guess is if the monthly c/c payment is £50 this would reduce what you can borrow by about £2700 just an example.

No, so our income is actually quite high between myself and my husband however our deposit is quite minimal, mainly due to savings being used whilst our son spent the first few years of his life in and out of hospital.
the cc was mainly used for new cooker (old one died on us Christmas Day) and other bits and pieces (car expenses etc)  so it’s not a big issue to pay off it ver next couple of months at all, we have just paid “boosted” amount each month. 

my question was is this a normal requirement? As it’s not on our actually offer under conditions and was just mentioned over phone. 

Markneath

I have had it as a requirement in the past but when close to my borrowing lending multiples for example, 180k mortgage when my limit was 185k. 

As I said if its an issue clear it just before you complete then use the c/c again the following month to pay for everyday items like food, fuel etc.

It can be surprising how a few things like c/c’s can really reduce your mortgage borrowing.

I’m self employed so at times have used personal c/c’s to improve the cash flow of my business when waiting to be paid for a big job, a few times its gone against me with mortgage applications then as it looks like I live on my c/c. 

I have btl’s so have made quite a few mortgage applications over the years.

Rambosmum

Barclays did this with us. But they never actually checked we paid it off (spoiler alert, we didn't!). 

ironlady2022

Keep it simple, if they say pay it and you can, do it. You don't want anything to jeapardise your mortgage app. 

TBagpuss

It's not uncommon, particularly if you have a small deposit and/or are borrowing at the top of your affordability. 
The lender can fo further credit checks at any point and in some cases will do one just before exchange.

I am not sure how common it is and presume that it depends to some extent on your credit profile and the lender' view of the risk you pose.

Last time I moved house, my original buyer's mortgage offer was withdrawn, because of the level of credit card debt they had. Obviously I don't know whether they had a specific condition of it being paid off or it was just that they had racked up too much between the offer being made, and the later check, but it can happen! 

lookstraightahead

Squeaky clean all the way up to completion.