Mortgage Offer Terms: Clear Credit Card After Completion?

Keeks2020

Hi all, 

I know there have been a number of threads on this topic but not specifically related to terms following completion. 

I received a Mortgage offer from Accord this week (yay!) and in the application I confirmed that I would repay the amount remaining on a credit card (£4k). 

In the offer it states:

" You must repay all the personal loans and/or credit card debts that you have told us you intend to pay within seven days of completion of your loan. If you do not repay those debts within that timescale you will be in breach of your obligations to us. Our affordability assessment has been completed on the basis that these debts will be repaid; failure to repay these could affect your ability to maintain your mortgage payments during the term of the Loan."

My question is how likely are they to check that this has been paid if the funds have already been cleared?

The reason I ask is because it is looking like completion may be sooner than anticipated and I may not be able to pay this off in time. 

EssexHebridean

It may well be that your solicitor will be expecting the money from you when they ask for balance of funds ahead of completion, in order that they can clear this debt. 

user1977

EssexHebridean said:

It may well be that your solicitor will be expecting the money from you when they ask for balance of funds ahead of completion, in order that they can clear this debt. 

I've never seen this form part of the instructions to solicitors. Generally the borrower is trusted to deal with it.

silvercar

EssexHebridean said:

It may well be that your solicitor will be expecting the money from you when they ask for balance of funds ahead of completion, in order that they can clear this debt. 

I doubt solicitors are in the business of making credit card repayments, though they may ask you to sign an undertaking that you agree to do it.

EssexHebridean

user1977 said:

EssexHebridean said:

It may well be that your solicitor will be expecting the money from you when they ask for balance of funds ahead of completion, in order that they can clear this debt. 

I've never seen this form part of the instructions to solicitors. Generally the borrower is trusted to deal with it.

I have - it doesn't happen often, but on occasion a lender has asked for the solicitor to ensure that the debt is cleared. In real terms, when this happens, the only practical way of dealing with it is to add the debt to the completion statement and request the funds as part of the money to complete. It can occur if a lender gets any feelings of "flakiness" around the likelihood of the debt being repaid - and that can occur because they have asked the solicitor outright if they feel there is any concern around the clearance of the debt, and the solicitor has had to reply that there is. 

silvercar

EssexHebridean said:

user1977 said:

EssexHebridean said:

It may well be that your solicitor will be expecting the money from you when they ask for balance of funds ahead of completion, in order that they can clear this debt. 

I've never seen this form part of the instructions to solicitors. Generally the borrower is trusted to deal with it.

I have - it doesn't happen often, but on occasion a lender has asked for the solicitor to ensure that the debt is cleared. In real terms, when this happens, the only practical way of dealing with it is to add the debt to the completion statement and request the funds as part of the money to complete. It can occur if a lender gets any feelings of "flakiness" around the likelihood of the debt being repaid - and that can occur because they have asked the solicitor outright if they feel there is any concern around the clearance of the debt, and the solicitor has had to reply that there is. 

Producing a download of the balance on the account would be one, less intrusive, way.

The 7 days after completion makes enforcing impossible. All OP has to do is declare he will pay off the balance on day 5, by which time he is in the property.

If push comes to shove and there is stamp duty to pay, OP could use some of the stamp duty money to clear the debt, then borrow (against the credit card or elsewhere) to make up the credit card balance. Stamp duty needs to be paid within 30 days following completion. I suspect the solicitor will hold their head in their hands at this point and wished they'd never asked.

moneyfocus88

Just following up on this to see what happened @Keeks2020
I am in the process of applying for a mortgage with accord and have said some debts will be paid (which they will) but want to know when they require proof etc and who do I provide that to? i.e. do I need to pay now and show evidence as part of the application.
I wasn't aware it may be dealt with via solicitor. 

user1977

moneyfocus88 said:

Just following up on this to see what happened @Keeks2020
I am in the process of applying for a mortgage with accord and have said some debts will be paid (which they will) but want to know when they require proof etc and who do I provide that to? i.e. do I need to pay now and show evidence as part of the application.
I wasn't aware it may be dealt with via solicitor. 

Has anyone said they will require proof? The bit quoted from the OP doesn't suggest they do.