Remortgage and Credit Card Debt

hufc2002

Hi 

Apologies if something similar has been asked before but I can't find anything.  

2 Year fix ends September 2024 which will leave just over £147k remaining (19 years) house worth around £230-240k).

Combined income of just over £81k and approximately £7k credit card debt (3 different cards all at 0%).

By the the time we come to re-mortgage this will have reduced to maybe £3k or £4k (hopefully less).

Is this credit card debt likely to cause us an issue when we come to remortgage?  This will be the only debt we have at that time as car loan will be settled in June 2024 and student loan will be finished in March 2024.

Thanks

amnblog

No it is not

hufc2002

amnblog said:

No it is not

Out of interest, what level of CC debt would cause an issue?  As per my original post, I want to clear as much of this as possible before my remortgage.

Brie

You're talking about a total of £154k debt currently with a combined income of more than half that.  I think most mortgage providers would love to have you apply.  

That is assuming of course that the £81k that you say is income is base income or does it include a lot of bonuses or overtime - things that are not guaranteed?  I doubt that even then it would be a problem.

But in any case they will look at your credit history (not your score) and see you ticking through the various debts at a good clip and getting into a better and better position.  I suggest you have a look at your credit history yourself now to see if there's anything lurking that you don't know about (parking notice "fines" turning into ccjs are the most frequent problem I've seen).

For what it's worth the last time we remortgaged our credit card debt was about equal to our take home and our mortgage provider was happy to proceed.  I doubt though that we could have gone with someone new and was in fact told informally by one of the mainstream banks to not bother applying.  That was 6 years back and everything is rosy now.

hufc2002

Yes our income is base income (Teacher and NHS worker).  Credit history look spot on so you have definitely put my mind at rest.

RelievedSheff

You should be absolutely fine with those figures. Your unsecured debt will be a very low percentage of your incomes.

fergie_

Its not so much the amount of CC debt, but how much the ledger decides you need to 'service' it. They then use algorithms to decide how that affects how much you can borrow based on affordability.

So in effect, it simply becomes another expense that is deducted from your budget such as living costs, childcare etc. 

But as others say, based on your income and LTV, the CC debt is not going to have the slightest impact.