Preparing for autumn remortgage

Hackneyboy

Having read the doom and gloom reports in the weekend's newspapers, most seem to agree that people like myself who are coming off their two-year fixed rate mortgage this year need to have their finances in perfect shape if we're to get any sort of deal.

My partner and I bought our house in December 2006, so we will be looking at new deals around September time. However, the newspapers were full of reports of people who'd been declined new deals for slight errors that once would have been brushed aside (such as missing a credit card payment etc).

Fortunately, my partner and I haven't ever missed a credit card or mortgage payment. We're on the electoral roll, credit seems to be ok.

Will any of the following, help or hinder us in six months time?

1. I've got a £2000 overdraft facility on my bank account but I haven't been overdrawn for a couple of years. I guess it's been there as a safety net but should I get rid of the overdraft facility? (Recently my bank wrote to me to say that they'd reviewed it and were happy to keep it at existing level.)

2. I've three credit cards - I use one but pay it off in full each month, but don't use the others. I've never missed a payment (although there were times when I paid off just the minimum, and once had late payment charge dropped because of post strike). Should I cancel the two I don't use, or keep them open with zero balance?

3. Will switching electric, broadband or mobile suppliers cause me any probs?

4. Will applying to credit rating agencies for my file cause any problems in six months time?

beecher

Can't answer most of your questions, and will leave that to those who know more, but I think you and your partner should get a hold of your credit ratings and see what it says, particularly to see if the late payment charge is mentioned.

zipman23

Stop thinking about yourself for a minute lol and have some sympathy for me and my girlfriend...our mortgage is with Northern Rock!!

zipman23

Hackneyboy wrote: »

2. I've three credit cards - I use one but pay it off in full each month, but don't use the others. Should I cancel the two I don't use, or keep them open with zero balance?
quote]


I've got 2 credit cards, one has a £600 limit but has been paid off for a few months now. The other has a £1600 limit and has about £1100 on it (puppy broke her leg on a car).

Whats the difference in having a credit card with a zero balance and cancelling it altogether. Is it better to cancel a card you don't use?

Hackneyboy

On one hand we're told that companies lend to people who've had credit in the past, but I read at the weekend that mortgage lenders won't take too kindly to credit cards with zero balance because there's the risk of you using up that available credit in the future. It also stated that companies will look back at your payment history on three years of existing credit cards, or six years if you've closed a credit card. In other words, if you missed a payment four years ago, you'd be better of leaving it open.

JCR

I don't think you'll have a problem. I went into the bank where my mortgage is currently and my current deal ends in June and they offered me a competitive rate on retentions with an arrangement fee of £125. The advisor said that a lot of the doom mongering is fuelled by the papers and the truth is that if you have a good mortgage payment record and show some initiative i.e. not wait until the last minute before sorting out the remortgage, you should be fine.

JCR

Don't take too much notice of the papers, they feed on doom and gloom. According to the mortgage advisor I saw today in one of the main banks, there shouldn't be a problem if you have a good record of paying up to now. You will probably be able to get a competitive deal with the bank you are with, or if not, you have time to look around to see what else is out there. I can't see that your credit history will be a problem.

JCR

Sorry I didn't think my post had gone through, so did another one - oops!!!

zipman23

Hackneyboy wrote: »

On one hand we're told that companies lend to people who've had credit in the past, but I read at the weekend that mortgage lenders won't take too kindly to credit cards with zero balance because there's the risk of you using up that available credit in the future. It also stated that companies will look back at your payment history on three years of existing credit cards, or six years if you've closed a credit card. In other words, if you missed a payment four years ago, you'd be better of leaving it open.

Ah right. Cheers for the heads up. I didn't mean to hijack your thread by the way so apologies if it came across like that especially when you were on here for advice. The card in question with the zero balance was eaten by my puppy (along with every other card in and including the wallet) about a month ago. I rang to get replacements sent out but that one hasn't turned up yet. Our mortgage is £650 a month, never missed a payment but then we've only had it 1 year gone January.