First time buyer/ over credit card limit-Help!

sarah_sian

Me and my boyfriend are just about to apply for a mortgage. We earn £35000 between us. We've got £5500 deposit and the house we want is £111000. I am currently £550 over limit on my credit card. I pay the minimum amount off the card by direct debit every month. Will this affect my chances of approval for the scottish widows mortgage? Would I be better to pay the £550 before applying for the mortgage. (I could do with using the money elsewhere though)Some people have said that mortgage lenders prefer people that only pay minimum amount as they will make more money. I dont know what to do for the best.

If you can help that'd be great thanks! x x x

brightbuy

Hi sarah_sian,

Mortgage lenders (as with any lender) prefer people who have paid off their debts and only have minimum credit available to them. The reason being is that they want to see that you have been approved for some previous credit and that you are managing your debt well.

The only way to really assess your situation is to advise you to obtain your credit report online which takes less than 10 minutes, this will give you a score which will be the same that any lender will get. Based on the basic information you have provided, I don't see there being a credit scoring issue but more with the size of your deposit due to the LTV required being around 95%.

sarah_sian

Thanks for the reply. I've checked my experian credit score online. It was 973, that seemed ok to me. Im still unsure about whether I need to pay the amount that is over the credit limit on my card to be on the safe side though or if the fact that I have a direct debit will be enough for them?

herbiesjp

Can you not ask the card company to increase the limit, by say £1000?