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  • FIRST POST
    • BoiledBreadTomatoSauce
    • By BoiledBreadTomatoSauce 14th Jun 19, 12:45 PM
    • 75Posts
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    BoiledBreadTomatoSauce
    Paying of all credit card debt first
    • #1
    • 14th Jun 19, 12:45 PM
    Paying of all credit card debt first 14th Jun 19 at 12:45 PM
    I'm saving 400 a month towards a deposit and by January 2020 should be nearing the target amout for my partner and I to start making applications.

    I'm also paying doen a credit card interest free and by that time it should be down to the 1000 mark. Am I better off waiting an extra few months and clearing this first before making any applications?

    There's no other debt outside student loan and the houses we'll be looking at are only around 2x our combined salary so affordability shouldn't be a huge problem. However will zero debt potentially mean we'll get a better rate?
Page 1
    • steampowered
    • By steampowered 14th Jun 19, 3:34 PM
    • 3,641 Posts
    • 3,754 Thanks
    steampowered
    • #2
    • 14th Jun 19, 3:34 PM
    • #2
    • 14th Jun 19, 3:34 PM
    I would go ahead and get your mortgage in principle now.

    Paying off your credit card debt won't mean you get a better rate. The rate tends to just be a function of your LTV.

    It might be a condition of your mortgage that the credit card debt is paid off by the time of completion. So you might have to do it - but have time to find a property and go through the conveyancing process first.
    • BoiledBreadTomatoSauce
    • By BoiledBreadTomatoSauce 14th Jun 19, 4:16 PM
    • 75 Posts
    • 9 Thanks
    BoiledBreadTomatoSauce
    • #3
    • 14th Jun 19, 4:16 PM
    • #3
    • 14th Jun 19, 4:16 PM
    I would go ahead and get your mortgage in principle now.

    Paying off your credit card debt won't mean you get a better rate. The rate tends to just be a function of your LTV.

    It might be a condition of your mortgage that the credit card debt is paid off by the time of completion. So you might have to do it - but have time to find a property and go through the conveyancing process first.
    Originally posted by steampowered
    Thanks for the response. Would that really be the case that they wouldn't offer a mortgage with any credit card balance?

    Should only put me back a couple of months even if so, but I'll be tight with the purse strings this next year to make sure it happens!
    • jamesperrett
    • By jamesperrett 15th Jun 19, 12:28 AM
    • 889 Posts
    • 527 Thanks
    jamesperrett
    • #4
    • 15th Jun 19, 12:28 AM
    • #4
    • 15th Jun 19, 12:28 AM
    I've had credit card balances when applying for a mortgage and it hasn't caused a problem although there is usually something in the mortgage offer to say that the credit card balance should be paid off before the mortgage is drawn down.
    • diggingdude
    • By diggingdude 15th Jun 19, 5:04 AM
    • 1,197 Posts
    • 1,621 Thanks
    diggingdude
    • #5
    • 15th Jun 19, 5:04 AM
    • #5
    • 15th Jun 19, 5:04 AM
    I had about 1,800 owing on my credit card, I wasn't asked to pay it off by mortgage company although I had already declared that I would and was easily within borrowing limits and extra savings etc so that may be why
    House owner as of 27.3.2019
    • BoiledBreadTomatoSauce
    • By BoiledBreadTomatoSauce 17th Jun 19, 8:53 AM
    • 75 Posts
    • 9 Thanks
    BoiledBreadTomatoSauce
    • #6
    • 17th Jun 19, 8:53 AM
    • #6
    • 17th Jun 19, 8:53 AM
    Thanks of all the responses - mildly frightening and not what I expected to hear, but I'll take onboard and try to pay it down more quickly!

    Are articles like the below just nonsense then? I've looked all over the internet, asked a friend who's a bank manager and seem to get mixed responses.

    My credit rating was Excellent last time I checked and haven't missed a payment on anything in well over a decade...

    https://www.which.co.uk/money/mortgages-and-property/mortgages/getting-a-mortgage-with-poor-credit/getting-a-mortgage-with-credit-card-debt-aw74f3b4lu5v
    • SuperHan
    • By SuperHan 17th Jun 19, 8:57 AM
    • 2,173 Posts
    • 1,312 Thanks
    SuperHan
    • #7
    • 17th Jun 19, 8:57 AM
    • #7
    • 17th Jun 19, 8:57 AM
    We have c 7k on an interest free card, promo period ending October 2020.


    We've had our final mortgage offer and it makes no reference to the credit card balance due so we will clear in October 2020 as planned,
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