Credit Card Debt

Agraham1826

Need a little bit advice. I have around £7000 worth of 0% finance to 2024. I am in no way panicked about paying it off. It paid for my kitchen and bathroom refurb. However, I need to remortgage in October, how much of that can I have left by the then to not raise eyebrows from lenders?

RelievedSheff

It depends on your affordability level.

We had over £15k of credit card debt when we remortgaged but we were well in on affordability so it really didn't make any difference to our application.

If you are tight in affordability then it may well make a difference.

hufc2002

Possibly a simple question but how do you gauge what your affordability level is?

I won't be starting the re-mortgaging process until about this time next year but also curious to know what level of debt would be acceptable at that point.

Happy to provide further details on income, outstanding mortgage balance etc if need be.

RelievedSheff

Have you tried some calculators on the lenders websites to see what they would be willing to lend you.

If you need a high percentage of what they would be willing to lend to you then you will need to have less debt. If what you want to borrow is much less than the amount that they would be willing to lend to you then more debt, within reason, would be acceptable. 

hufc2002

LTV will be just over 60% by the time I come to remortgage.  Car loan will also be paid off along with current credit card debt.  I just didn't want to take on any additional debt (possibly a Summer Holiday) if this was going to have a major impact on remortgage.

RelievedSheff

Should you really be taking on debt to go on holiday anyway regardless of the effect it has on a mortgage application?

hufc2002

What if it was an expensive 'once in a life time holiday' which was easily affordable on a monthly basis if it was put on a 0% credit card?  Is it an expectation that everyone saves up for everything and therefore have zero debt?

kingstreet

Agraham1826 said:

Need a little bit advice. I have around £7000 worth of 0% finance to 2024. I am in no way panicked about paying it off. It paid for my kitchen and bathroom refurb. However, I need to remortgage in October, how much of that can I have left by the then to not raise eyebrows from lenders?

Some lenders "tax" mortgage affordability by 5% of the card balance, others by 3%.

Enter your details into a lender's online calculator and test the output with all, some and none of the card debt. Gauge the different outputs. It's entirely possible it may have no impact at all or there may be a big difference. Only you can establish what.