Move overdraft + credit card debt and remortgage - what order?

Jillstephens

Hi,
My husband and i have a joint mortgage which is on a variable rate we want to remortgage for a better rate, he is working I am now on benefits. Our mortgage has gone up from £536 to £700 in a matter of months.

I  have a NatWest credit card in my name which has is on 18.9% with £1400 on it - we want to see if we can get a balance transfer to a £0% card in my husband's name as I'm not working, or can would I be accepted with benefits?? Don't know how much I'm getting yet.We currently pay at least £100 a month off on this.

We have a joint bank NatWest account which is £3000 overdrawn - we want to open a new bank account to use - hopefully with cashback so we can regard this as a debt we just pay money into each month and pay off. Could we transfer this overdraft to a 0% credit card to enable us to make faster dents in the actual amount owing rather than interest - the interest this month was £17 but I couldn't see the APR.

I don't know what order we should tackle these things in - if we switch our bank account first could it stop us getting a mortgage deal?
Should we move the overdraft to %0 first and leave the credit card alone for now? Although if my husband gets accepted for 0% card maybe his limit wouldn't be high enough to do that. Or maybe we need to sort all this first before getting a mortgage review and spend a month reducing our spending so we look like a better bet?

My husband earns £21,500 a year and his contract runs out in March has been extended from original contract which started June 2021.

I had to leave work after being ill and am still struggling and would really appreciate a steer in the right direction.

Thanks in advance,

Jill

 

Ebe_Scrooge

Jillstephens said:

I  have a NatWest credit card in my name which has is on 18.9% with £1400 on it - we want to see if we can get a balance transfer to a £0% card in my husband's name as I'm not working, or can would I be accepted with benefits??

 

Some card issuers can be a bit funny about transferring debt from someone else's card - though some are fine with it.  Anecdotally, if you do the transfer online rather over the phone, there's usually no issue.  Of course, if you do this, your husband becomes solely responsible for the debt (this probably doesn't bother you too much unless you're planning on divorcing in the near future!!).  But you could try for a card in your own name - benefits are a perfectly legitimate form of income to declare, as long as it's regular income.

Jillstephens said:

We have a joint bank NatWest account which is £3000 overdrawn - we want to open a new bank account to use - hopefully with cashback so we can regard this as a debt we just pay money into each month and pay off. Could we transfer this overdraft to a 0% credit card to enable us to make faster dents in the actual amount owing rather than interest - the interest this month was £17 but I couldn't see the APR.

 

You can't use a normal balance-transfer card, but you can use a money-transfer card - assuming you're accepted for one, of course.  There's often a fee to pay for doing the transfer, so just factor that into your calculations.  But it's definitely a good idea to pay off the overdraft.  Apart from being a very expensive way of borrowing, a bank can actually remove the overdraft facility and demand immediate and full repayment at any time.

Having said all this, it's generally advised not to take out any new credit products in the run-up to a mortgage application.  If it would be feasible for you to scrimp and save for a few months and pay off the debt, this would be better from a mortgage application point of view.

born_again

1st get the O/D down, that is the most expensive debt. No you can't transfer it to your CC. Unless it has a cash transfer offer & your limit is high enough. (comes with fee's as a rule)
Switching bank could be a issue. As you would need to find a bank that would give you a O/D to match what you have now, as a full switch will mean that account is closed.
So switch may not be a good move if wanting to remortgage.

Maybe find a mortgage broker local & see if they can find good deals, but that is not going to be easy at the moment. Especially if you are not working, which I guess was included in getting  the mortgage you have now.

I would look at the debt board & a statement of affairs. 

Jillstephens

Ebe_Scrooge said:

Jillstephens said:

I  have a NatWest credit card in my name which has is on 18.9% with £1400 on it - we want to see if we can get a balance transfer to a £0% card in my husband's name as I'm not working, or can would I be accepted with benefits??

 

Some card issuers can be a bit funny about transferring debt from someone else's card - though some are fine with it.  Anecdotally, if you do the transfer online rather over the phone, there's usually no issue.  Of course, if you do this, your husband becomes solely responsible for the debt (this probably doesn't bother you too much unless you're planning on divorcing in the near future!!).  But you could try for a card in your own name - benefits are a perfectly legitimate form of income to declare, as long as it's regular income.

Jillstephens said:

We have a joint bank NatWest account which is £3000 overdrawn - we want to open a new bank account to use - hopefully with cashback so we can regard this as a debt we just pay money into each month and pay off. Could we transfer this overdraft to a 0% credit card to enable us to make faster dents in the actual amount owing rather than interest - the interest this month was £17 but I couldn't see the APR.

 

You can't use a normal balance-transfer card, but you can use a money-transfer card - assuming you're accepted for one, of course.  There's often a fee to pay for doing the transfer, so just factor that into your calculations.  But it's definitely a good idea to pay off the overdraft.  Apart from being a very expensive way of borrowing, a bank can actually remove the overdraft facility and demand immediate and full repayment at any time.

Having said all this, it's generally advised not to take out any new credit products in the run-up to a mortgage application.  If it would be feasible for you to scrimp and save for a few months and pay off the debt, this would be better from a mortgage application point of view.

Thank you Ebe_Scrooge I didn't know about the cash transfer vs normal balance transfer issue so that's really useful thank you. It's also good to know I can apply for a credit card in my own name - this gives us more options. I've got £800 in savings ready to pay something off with and I know the overdraft is the more urgent bit I'm just worried that the money will get caught up in the chaos of the current account - I'm finding it really hard to see it as a clear debt to pay off while we are still using that account and am desperate to set up some new bank account to pay the day to day money out of and so the overdraft become a debt that I can chip away at.

Jillstephens

born_again said:

1st get the O/D down, that is the most expensive debt. No you can't transfer it to your CC. Unless it has a cash transfer offer & your limit is high enough. (comes with fee's as a rule)
Switching bank could be a issue. As you would need to find a bank that would give you a O/D to match what you have now, as a full switch will mean that account is closed.
So switch may not be a good move if wanting to remortgage.

Maybe find a mortgage broker local & see if they can find good deals, but that is not going to be easy at the moment. Especially if you are not working, which I guess was included in getting  the mortgage you have now.

I would look at the debt board & a statement of affairs. 

Thank you born_again for the signposting, just finding my way here and for the heads up about the bank account, I'm guessing the way round this would be to open another account rather that switch. Thanks again.

grumbler

Jillstephens said:

Ebe_Scrooge said:

Jillstephens said:

I  have a NatWest credit card in my name which has is on 18.9% with £1400 on it - we want to see if we can get a balance transfer to a £0% card in my husband's name as I'm not working, or can would I be accepted with benefits??

 

Some card issuers can be a bit funny about transferring debt from someone else's card - though some are fine with it.  Anecdotally, if you do the transfer online rather over the phone, there's usually no issue.  Of course, if you do this, your husband becomes solely responsible for the debt (this probably doesn't bother you too much unless you're planning on divorcing in the near future!!).  But you could try for a card in your own name - benefits are a perfectly legitimate form of income to declare, as long as it's regular income.

Jillstephens said:

We have a joint bank NatWest account which is £3000 overdrawn - we want to open a new bank account to use - hopefully with cashback so we can regard this as a debt we just pay money into each month and pay off. Could we transfer this overdraft to a 0% credit card to enable us to make faster dents in the actual amount owing rather than interest - the interest this month was £17 but I couldn't see the APR.

 

You can't use a normal balance-transfer card, but you can use a money-transfer card - assuming you're accepted for one, of course.  There's often a fee to pay for doing the transfer, so just factor that into your calculations.  But it's definitely a good idea to pay off the overdraft.  Apart from being a very expensive way of borrowing, a bank can actually remove the overdraft facility and demand immediate and full repayment at any time.

Having said all this, it's generally advised not to take out any new credit products in the run-up to a mortgage application.  If it would be feasible for you to scrimp and save for a few months and pay off the debt, this would be better from a mortgage application point of view.

 I didn't know about the cash transfer vs normal balance transfer issue so that's really useful thank you.

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