Should I clear 0% credit card balance before remortgaging?

NaughtiusMaximus

Our 5 fixed rate mortgage expires in March next year so we'll be looking for new mortgage deals over the next couple of months.

I have a balance of 21k across two 0% interest credit cards against total savings of 70k so I could clear the cards immediately if I wish. Is it worth doing so? Would having this credit card balance at the time of the mortgage application cause any problems?

ACG

Its all relative. 
If your incomes are say £50k combined, £21k is pretty high. 
If your incomes are £150k combined then £21k isnt as bad. 

The other thing to consider is what your limits are, if your limits are £22k, then £21k means you are using almost 100% of your available credit which some lenders thrown upon. Other lenders might prefer that over having £50k of available credit. 

But in all honesty those things are generally minor points which only really make a difference if you are borderline to begin with. 

If your incomes are say £80k combined and you are at 60% LTV, then realistically it probably wont matter too much what you do. I suppose the devil is in the detail. 

NaughtiusMaximus

ACG said:

Its all relative. 
If your incomes are say £50k combined, £21k is pretty high. 
If your incomes are £150k combined then £21k isnt as bad. 

The other thing to consider is what your limits are, if your limits are £22k, then £21k means you are using almost 100% of your available credit which some lenders thrown upon. Other lenders might prefer that over having £50k of available credit. 

But in all honesty those things are generally minor points which only really make a difference if you are borderline to begin with. 

If your incomes are say £80k combined and you are at 60% LTV, then realistically it probably wont matter too much what you do. I suppose the devil is in the detail. 

Thanks for responding.

Our combined income is 55k, my total credit limit across 5 cards is 40k, though the two 0% cards are maxed out. My wife has 2 cards with a total limit of around 15k which she clears each month, aside from the mortgage and my card balance we have no other debts. 

Our LTV ratio is approximately 45% and if interest rates don't change between now and when we renew, I estimate we'll be paying around £800pm.

ACG

Honest opinion is that it probably wont hurtto maybe knock maybe £2k off each one. 
It brings the percentage of the limits down, it gets you away from being close to 50% of household income and brings the repayments down. 

But in all honesty, I dont think you will have a problem. You might (and I do only mean might), find a fussy lender has a problem but that really does depend on the rest of the case as a whole. 

If I was being cautious I would say bring them down a little bit to help. But if you dont, I dont think you will struggle either. 

NaughtiusMaximus

ACG said:

Honest opinion is that it probably wont hurtto maybe knock maybe £2k off each one. 
It brings the percentage of the limits down, it gets you away from being close to 50% of household income and brings the repayments down. 
. 

Thanks, I'll go with that plan then