Mortgage with settled credit card

ncybernut

My husband and I are looking to purchase a larger family home. We only need to borrow 50% of the value of the home as we have the other half as equity in our current property.

I have recently settled my credit cards of £14,000 but this has not yet updated on my credit file. Would this cause problems getting the mortgage. Affordability calculators show we can afford the required mortgage. The only other debt we have is a small Next account of £500.

Thank you

[Deleted User]

Lenders see a real time view of credit files, which you don't unless you're paying for them.

You'll also be able to demonstrate that the card has been cleared.

[Deleted User]

Hi If the card balance is still shown on your credit report then declare it on the AIP ,but you can state that this will be cleared prior to completion. 

K_S

ncybernut said:

My husband and I are looking to purchase a larger family home. We only need to borrow 50% of the value of the home as we have the other half as equity in our current property.

I have recently settled my credit cards of £14,000 but this has not yet updated on my credit file. Would this cause problems getting the mortgage. Affordability calculators show we can afford the required mortgage. The only other debt we have is a small Next account of £500.

Thank you

@ncybernut The lender system will be seeing the same out of date credit report as you.

What impact (if any) it has will depend on whether or not the 14k cc debt (it will be automatically factored in as a monthly commitment at 3-5% of the balance depending on the lender, so £420-700/month) impacts your affordability and what LTV you're borrowing at.

If it is material, and the DIP is failing when you leave it out, as the poster above said, you could put it at 14k on the AIP and mark it as to be paid off before completion, that should sort it out as it's a low LTV application.

If you're using a broker, just share a recent copy of the credit report so they can key it in accordingly.