Usage of Credit Card before Mortgage Approval

DaffyDuck316

I appreciate what you are telling me. I think what I will do is borrow some money off a mate as cash to pay for shopping and petrol over the next six weeks or so. It should only be a small amount needed if anything.

annetheman

DaffyDuck316 said:

Hi annetheman,

I hope you are well and on track with your savings.

Yeah, I got my offer through a mortgage broker and they told me they could only find one lender.

I am so anxious at the moment. I thought my mortgage application would be accepted or rejected based on my credit card activity. What I didn't see coming was that my mortgage could be approved with a possible special instruction that my credit card needed to be cleared. I didn't know that was a thing. So now my mortgage has been approved, this has triggered an invoice from my mortgage broker. Apparently the mortgage offer comes in the post so I just have to wait and see and hope there are no special instructions.

I think if worst comes to worst I can ask my boss for a gift (it is nearly Christmas), it probably would have saved me a lot of stress if I was brave enough to ask for a gift in the beginning, but damn if it falls through now and I have paid for survey/disbursements/broker fees, I'll be so depressed.

I should preface that I am not an expert, just speaking from my own experience! For the multiple mortgage applications I have unfortunately endured, my understanding is that IF your broker applied saying you have £1,000 credit card debt and by the time of taking the mortgage i.e. completion, you will have £0 credit card debt, then they will put clearing that debt as a mortgage offer condition.

If your mortgage broker applied saying you have £1,000 credit card debt and you will still have £1,000 credit card debt be completion, no problem (they might still put it as a condition, but you don't need to *do* anything about it). 

So first would definitely be to triple check with your MB what they stated in the application.

After your offer is received, if you still don't have enough for the potential completion statement, you can just negotiate with the seller on completion date to allow you time to work the shifts you need to make up the shortfall. Of course, if it's ridiculous like 3+ months, they may be unwilling. But if it's a month or two, you might find they can be patient (I am sorry if I forgot when you said you'd be clear!)

With regards to gift, if your boss is willing to gift the cash, that is very kind of them and they will need to declare it is a gift with no intention of its return. Stating or agreeing anything otherwise would be fraud.

I'll just say as previously mentioned, I gifted my dad a very similar amount to what he gifted me for my first ever flat's deposit in February 2021. Just coincidentally. His birthday was in April and I lacked imagination....

Luckily this time, no need because we are completing on my pay day anyway (taking longer than I hoped, still no exchange........ )

It's a really anxious time. You have my total empathy. Hopefully if you start talking dates with your seller, you can negotiate enough time to give you breathing room - it might totally relieve the whole gift thing anyway if you just agree something far enough to save enough, and it is totally okay to do so, don't be backed into a corner on the completion date thing.

All the best of luck!