Should the credit cards stay or go?

andsoitbegins

Bought my first house which needs some work doing on it, got some money saved but not enough for the necessary work.

I'm looking at applying for a 15k loan over 5years. My salary £37350. My mortgage is £833. I only pay half but it is in my name and comes out of my account. 

I have two credit cards one with 3k on and another 5k. Both clear. No other credit, dependents etc. 

So my question is...I have been reading about 'potential debt' so should I get rid of my 5k credit card before applying?  
I'm still not totally sure how affordability is worked out as I do split the bills but as I say the mortgage is in my name only. 

Would rather have a loan that's a set amount, know where I am at etc than spreading costs over credit cards. 

Thank you for any advice given. 

andsoitbegins

Nobody at all has any advice?!

MorningcoffeeIV

Keep them both.

The limits are modest and you don't want to make yourself look higher risk than you are.

enthusiasticsaver

Do you mean you have an £8k credit availability on cards but  owe nothing on them?  I would keep them open.  I am not  sure I would apply for such a large loan though given your mortgage is reasonably high (it does not matter that someone else pays half as on paper you are solely responsible for it) and on an average salary. Can you break the work down into cheaper stages? 

andsoitbegins

Thank you @enthusiasticsaver. 
Yes that's correct I have 8k on two credit cards but always paid within the month on the rare occasion I use one. 

I could leave one of the not as urgent jobs till later down the line. Which I think I estimate takes me down to borrowing 11k. 
I'm not sure how they work out affordability but does that number sound more acceptable you think? 

enthusiasticsaver

Did you go up to maximum affordability when you got your mortgage? If you only recently got it I would leave it at least 6 months. Borrowing after taking out a mortgage is sometimes a red flag. If your salary is less than £38k that is approx £1900 per month? Once you deduct your mortgage of £833 that only leaves £1000 spare for bills, living expenses and loan repayment  and there has to be some leeway in case interest rates go up. I think that looks tight on affordability but they all have their own formulas. What would the repayment be on an £11k loan over 5 years? 

If you are able to do a soft search to check if you would be approved I would explore that option. If someone is living with you and splitting the mortgage unofficially they have certain rights to the property should you split.  The bank will  see you as responsible for the full amount if you are the only mortgage holder. Is it a partner and if so why didn’t you do a joint application then affordability would be better for new borrowing. 

[Deleted User]

Who is the other person paying half the mortgage? Is that person happy to pay half but in reality have no legal claim on half of the asset? Or has it been done this way owing to previous debt? Just being curious.

R_P_W

How much do you have left each month after all your bills are paid?  do you have any savings?

Just my personal view, but I'd be very nervous about borrowing £15k on a £38k salary.  Is your mortgage payment fixed and for how long?  you need to think about how you would service the mortgage and loan payment in the event that you end up paying 100% of the mortgage each month?

andsoitbegins

I actually take home around £2300 as I do regular overtime. 
So I do get to put aside money for savings. 

I get approved 95% on the soft search for AA, Sainsbury's etc but it asks for my half of the bills. I've no idea whether this changes to a more in depth question on the application. As I answer with my half but I am responsible for the mortgage. So it's quite confusing as to how to answer. 

If I suddenly was responsible for everything money would be tight for sure but not impossible. 

martinbainbridge1975

andsoitbegins said:

I actually take home around £2300 as I do regular overtime. 
So I do get to put aside money for savings. 

I get approved 95% on the soft search for AA, Sainsbury's etc but it asks for my half of the bills. I've no idea whether this changes to a more in depth question on the application. As I answer with my half but I am responsible for the mortgage. So it's quite confusing as to how to answer. 

If I suddenly was responsible for everything money would be tight for sure but not impossible. 

some of the question sets can be quite confusing it may be worth a call, some lenders these days use open banking so as part of the application they may ask to view your account and look at income and outgoings, question to consider is what income have you remaining factoring in the extra loan and would you be able to live on it.

as someone who has learned from mistakes in the past, I am wary of unsecured debt,  I would maybe consider looking at utilising your cards and doing the work in stages with 0% purchase and money transfer cards a suggestion