Balance transfer before mortgage app - really want to, but don’t need to. Advice?

7sefton

Hi everyone- looking for any advice before I apply for a new balance transfer card. 

For what it’s worth, I have a good credit score. In the next 2-6 months, I intend to buy a house (c. £1m) with my partner and apply for a mortgage (70% LTV). Between us we earn £150k, I am the only one with credit card debt.

For years I’ve been obsessive about stooging/0% spending, and manage my credit cards carefully. At the moment I have: 

5 credit cards, only 2 with balances 
£35k total available credit 
£19k used credit (57% utilisation, all manageable 0% debt) 

£8K of this debt it coming to the end of its 0% period this month. I want to balance transfer it to a new card, but don’t want to wreck my mortgage chances. 

I suspect the sensible advice is just don’t do it: pay off the £8k with savings and suck up the fact I could have transferred it for another 2 years and let inflation erode the debt further. But if I can get away with balance transferring, I want to.

Any thoughts / anyone know what the impact of a mortgage app would be if I did?

[Deleted User]

If you're going to do it, I would do it now, because you don't want to do it once you have an offer and are committed to buying.

Carrying that amount of debt doesn't look great, but it will look a whole lot worse if it's interest bearing.

7sefton said:

For what it’s worth, I have a good credit score. 

It's not worth anything. Lenders will only be interested in your credit history and circumstances.

A lender may want the debt to be cleared on or before completion. Will you be able to do that or are you already struggling to get the deposit together?

7sefton

Not struggling at all and could clear all the debt many times over with savings… it just makes sense to let the 0% debt degrade over time (especially due to high inflation) and earn a little interest on the cash. 

K_S

@7sefton 150k application income, low LTV, good credit history, so far so good.

Unless there are other complicating factors in the background or you are looking to absolutely maximise borrowing and the 19k of background cc debt (equating to a 3% monthly payment for most mortgage lenders, irrespective of whether it's 0% or not) is impacting that, the BT shouldn't make any material difference.

The two scenarios in which it *may* have an impact is the short-term impact of a hard credit check (again, only likely to be an issue if you have some other complications that aren't evident in your post) or the potentially short period of time where your credit reports may show the 8k debt twice due to the delay in it being updated.