Mortgage Lenders who will lend under the provision of debts being paid off after completion

eleanorl89

Exactly as the title says really

are there any mortgage lenders who would lend under the proviso that credit card debts would be paid off in full, with the proceeds of our sale 

so effectively we will sell out current home, make some profit, pay off current debts that can’t be paid in full without selling the home, then buy an onward purchase

the thing is, obviously these debts are showing on credit file at the moment but obviously would be wiped out immediately after completion 

the mortgage lender we have been working with hasn’t been great with this. Our current mortgage is with skipton & they have said no, which is frustrating meaning we’d have to pay an 8k early repayment fee

thanks guys

ACG

When you say after completion, do you mean on the same day as completing on the mortgage or 6 months later? 

Hoenir

eleanorl89 said:

the mortgage lender we have been working with hasn’t been great with this. Our current mortgage is with skipton & they have said no, which is frustrating meaning we’d have to pay an 8k early repayment fee

Depends on what you are proposing. Also your recent credit history. If the problem is self created then lender's may agree that it's the answer but not the solution to whatever caused the problems in the first place.  

grumpy_codger

eleanorl89 said:

Mortgage Lenders who will lend under the provision of debts being paid off after completion

And what can they do if you promise, but don't pay the debts off?
That said, Halifax did stipulate in the mortgage offer that I must clear two (0%) credit cards (few thousand £) after the completion, but IMO this was just a formality.

eleanorl89

ACG said:

When you say after completion, do you mean on the same day as completing on the mortgage or 6 months later? 

@ACG same day. So basically as soon as the funds come from the sale, the cards would be paid off. I just wondered if there were any lenders that wrote stuff like that into the terms of completion 

eleanorl89

grumpy_codger said:

eleanorl89 said:

Mortgage Lenders who will lend under the provision of debts being paid off after completion

And what can they do if you promise, but don't pay the debts off?
That said, Halifax did stipulate in the mortgage offer that I must clear two (0%) credit cards (few thousand £) after the completion, but IMO this was just a formality.

Yes this is what i mean. Are there any lenders that would write it into the terms that x y or z must be paid off within x amount of days of completion. The plan would be to pay off as soon as the funds from the sale came anyway

ACG

eleanorl89 said:

ACG said:

When you say after completion, do you mean on the same day as completing on the mortgage or 6 months later? 

@ACG same day. So basically as soon as the funds come from the sale, the cards would be paid off. I just wondered if there were any lenders that wrote stuff like that into the terms of completion 

Skipton will do that usually. Did they give a reason they would not do it? 

eleanorl89

ACG said:

eleanorl89 said:

ACG said:

When you say after completion, do you mean on the same day as completing on the mortgage or 6 months later? 

@ACG same day. So basically as soon as the funds come from the sale, the cards would be paid off. I just wondered if there were any lenders that wrote stuff like that into the terms of completion 

Skipton will do that usually. Did they give a reason they would not do it? 

Mortgage advisor just said that they said no! So not sure where to go from there. Do we get in touch with them ourselves? Checked his credit rating & it’s in the ‘good’ bracket at 922 out of 999, with no missed payments or anything. Just credit cards & loan on there, which will of course be paid off after completion. Very frustrating!

ACG

It sounds wrong. Do they know you plan on clearing it on the same day? There wasnt a mix up and they assumed it would be done down the line? 

I suppose there is no harm in asking the question to skipton directly. 

Hoenir

eleanorl89 said:

ACG said:

eleanorl89 said:

ACG said:

When you say after completion, do you mean on the same day as completing on the mortgage or 6 months later? 

@ACG same day. So basically as soon as the funds come from the sale, the cards would be paid off. I just wondered if there were any lenders that wrote stuff like that into the terms of completion 

Skipton will do that usually. Did they give a reason they would not do it? 

Checked his credit rating & it’s in the ‘good’ bracket at 922 out of 999, with no missed payments or anything. 

Lenders and in particular underwriters view credit history in a very different manner. The number is meaningless. Far more about the debt itself , how it has accummulated over the 72 months that are visible on the credit search. Remember lenders have credit checked many millions of borrowers. Patterns emerge that enable them to refine their decision making. 

hayley_85

Barclays were good when we remortgaged with them. The extra money we were borrowing was to pay off the credit cards/loans so they didnt include them in the calculations. We just had to sign a form saying we were agreeing that they were lending to us on the proviso we were paying off the debts but no-one ever actually checked that we had done. Santander wouldnt allow this, they included the debts regardless of if you were paying them off with the money they were lending.