Mortgage with credit card debt to clear

IveBeenDavidBrent

Hi, first time poster!
Unfortunately my wife and I are divorcing, after 7 years of marriage with 2 children.

The plan, albeit at an early stage is to sell the family home and each buy our own place, sharing custody of the children.

We have a house worth in the region of £575k, with a mortgage of £260k, so a healthy chunk of equity to split. I have a good salary of around £90k, with a good deposit, mortgage affordability for the sort of house I’m looking at (375-425) is not a problem.

The difficulty is that I have a rather large credit card balance of around £28k, result of years of overspending and mismanagement (not mine!) a not insignificant factor in the decision to divorce. I also have a car finance for my wife’s car that would transfer to her before we split. My intention is to use the money from the house sale to clear the credit card debt, so I’d start a fresh in our new life. This would leave me with around a £100k deposit, plus fees and a moderate slush fund, so would be taking a 275-325k mortgage.

Now to my question: when I do a decision in principle for that amount on the basis that I won’t have the debt when I’ve , without declaring the credit card debt, I pass comfortably. However if I’m forced to include the debt, reflecting my current position, my agreed borrowing amount is significantly lower. 

Would I be able to convince lenders to lend me the higher amount, on the basis that the house sale would clear the credit card debt? Or would lenders be less inclined to do that and only consider the debt level I currently have?  Any experience greatly welcomed!

kingstreet

Some lenders ignore credit being repaid, some don't. You need to choose carefully - not Santander, nor Platform, is the right start. Broker assistance would probably suit you best.

jlfrs01

I was in a smilar position myself a few years back. I used a broker to find a lender who was prepared to ignore the credit card debts which showed up on the credit check in terms of the figure they'd lend. I went with Accord (a lending arm of Yorkshire Building Society) who only work via the broker network. The mortgage offer was conditional on the credit cards being wiped within 6 months. The broker was called "The Mortgage Brain" but I'm sure many others have access to Accord and other lenders.
If any of these cards are in joint names then your ex will be in a similar situation I imagine.