Credit card debt and mortgage
Discussion
Genuinely asking for a friend, but he’s about to complete on a house purchase and although has a large credit card facility, he’s never used it.
But wants to draw some money from the credit card BEFORE the mortgage completes.
He reckons the credit report balances only update at the end of each month, so even if the mortgage company do another credit check before the mortgage completes, it won’t show.
Does anyone know if a) they do another credit check before drawing the funds and b) if they do, is he right on what he says about the balance only updating monthly?
I’ve given him my opinion about it not worth the risk!
But wants to draw some money from the credit card BEFORE the mortgage completes.
He reckons the credit report balances only update at the end of each month, so even if the mortgage company do another credit check before the mortgage completes, it won’t show.
Does anyone know if a) they do another credit check before drawing the funds and b) if they do, is he right on what he says about the balance only updating monthly?
I’ve given him my opinion about it not worth the risk!
I’m a broker.
The lenders don’t do a credit check as a matter of course near completion but they do often happen when a conveyancer asks for a new offer due to a clause query, change to agreed price or some other issue.
Sometimes a lender will re-score as they cross a critical time line and need to refresh a valuation or someone asks for an update to the deal as the rate has dropped before completion etc.
Lenders have very sophisticated systems at their disposal if they chose to use them.
I wouldn't risk it but many do. I typically have a few cases a year that go wrong where a client takes out credit before completion and something triggers the lender to re-score.
The lenders don’t do a credit check as a matter of course near completion but they do often happen when a conveyancer asks for a new offer due to a clause query, change to agreed price or some other issue.
Sometimes a lender will re-score as they cross a critical time line and need to refresh a valuation or someone asks for an update to the deal as the rate has dropped before completion etc.
Lenders have very sophisticated systems at their disposal if they chose to use them.
I wouldn't risk it but many do. I typically have a few cases a year that go wrong where a client takes out credit before completion and something triggers the lender to re-score.
Caddyshack said:
I’m a broker.
The lenders don’t do a credit check as a matter of course near completion but they do often happen when a conveyancer asks for a new offer due to a clause query, change to agreed price or some other issue.
Sometimes a lender will re-score as they cross a critical time line and need to refresh a valuation or someone asks for an update to the deal as the rate has dropped before completion etc.
Lenders have very sophisticated systems at their disposal if they chose to use them.
I wouldn't risk it but many do. I typically have a few cases a year that go wrong where a client takes out credit before completion and something triggers the lender to re-score.
Interesting thanks for the reply. The lenders don’t do a credit check as a matter of course near completion but they do often happen when a conveyancer asks for a new offer due to a clause query, change to agreed price or some other issue.
Sometimes a lender will re-score as they cross a critical time line and need to refresh a valuation or someone asks for an update to the deal as the rate has dropped before completion etc.
Lenders have very sophisticated systems at their disposal if they chose to use them.
I wouldn't risk it but many do. I typically have a few cases a year that go wrong where a client takes out credit before completion and something triggers the lender to re-score.
I don’t know of anything that would cause a rescore as it seems a fairly routine purchase but I’ve said don’t do it. I actually think he needs some money for the deposit as he’s got a bonus coming in April so this would bridge it.
Why doesn't your friend just the facility after the purchase completes?
Don't you get penalised at massive interest rates and charges "draw down" a credit card facilitiy i.e withdraw cash / transfer to your bank? Can't see it being worthwhile, for what, 40% interest + charges.
Admit I am not clued up on credit cards, only read the terms of my own.
Don't you get penalised at massive interest rates and charges "draw down" a credit card facilitiy i.e withdraw cash / transfer to your bank? Can't see it being worthwhile, for what, 40% interest + charges.
Admit I am not clued up on credit cards, only read the terms of my own.
If he wants a bridging loan, then get a bridging loan.
Using a credit card for that purpose doesn't seem like a good idea. Also, most card providers limit the amount that can be withdrawn as cash anyway. So he might suddenly find he cannot use all of the credit facility he thinks he has.
Using a credit card for that purpose doesn't seem like a good idea. Also, most card providers limit the amount that can be withdrawn as cash anyway. So he might suddenly find he cannot use all of the credit facility he thinks he has.
Caddyshack said:
I’m a broker.
The lenders don’t do a credit check as a matter of course near completion but they do often happen when a conveyancer asks for a new offer due to a clause query, change to agreed price or some other issue.
Sometimes a lender will re-score as they cross a critical time line and need to refresh a valuation or someone asks for an update to the deal as the rate has dropped before completion etc.
Lenders have very sophisticated systems at their disposal if they chose to use them.
I wouldn't risk it but many do. I typically have a few cases a year that go wrong where a client takes out credit before completion and something triggers the lender to re-score.
This happened to me as I was about to complete, took on some credit card debt as everything had been agreed months prior and a new credit check was done just before completing, I was told if I didn't pay off and debt taken on since being offered the mortgage my offer would be lowered to represent the extra debt I had taken out.The lenders don’t do a credit check as a matter of course near completion but they do often happen when a conveyancer asks for a new offer due to a clause query, change to agreed price or some other issue.
Sometimes a lender will re-score as they cross a critical time line and need to refresh a valuation or someone asks for an update to the deal as the rate has dropped before completion etc.
Lenders have very sophisticated systems at their disposal if they chose to use them.
I wouldn't risk it but many do. I typically have a few cases a year that go wrong where a client takes out credit before completion and something triggers the lender to re-score.
Cleared the credit card and it wasn't an issue, I was a ftb and unaware this would have any impact, luckily I was in a position to pay it off
SV_WDC said:
If he wants a bridging loan, then get a bridging loan.
Using a credit card for that purpose doesn't seem like a good idea. Also, most card providers limit the amount that can be withdrawn as cash anyway. So he might suddenly find he cannot use all of the credit facility he thinks he has.
Bridging loans are the best way to burn money known to man.Using a credit card for that purpose doesn't seem like a good idea. Also, most card providers limit the amount that can be withdrawn as cash anyway. So he might suddenly find he cannot use all of the credit facility he thinks he has.
Tell your friend to be very careful around using credit card cash for anything related to a house purchase. Some cards expressly forbid using them for deposits, mortgage payments or anything similar.
I have also been told to pay off a (tiny) card balance as a condition of getting a mortgage as well
I have also been told to pay off a (tiny) card balance as a condition of getting a mortgage as well
Found out a bit more today.
He’s £10k short for a house deposit. He already has an MBNA credit card which does money transfers (like a balance transfer but straight into your account) with a £15k limit (he’s not used it for years).
It does 2 options. 3% fee with 0% interest or 0% fee and 6.9%.
He’s getting a £15k bonus in a month and will clear it. He reckons £10k will only cost £57.50 for the month.
But I’ve sent the fear of god up him saying that if they rescore it and see £10k outstanding on CC they could pull the offer.
He’s £10k short for a house deposit. He already has an MBNA credit card which does money transfers (like a balance transfer but straight into your account) with a £15k limit (he’s not used it for years).
It does 2 options. 3% fee with 0% interest or 0% fee and 6.9%.
He’s getting a £15k bonus in a month and will clear it. He reckons £10k will only cost £57.50 for the month.
But I’ve sent the fear of god up him saying that if they rescore it and see £10k outstanding on CC they could pull the offer.
audi321 said:
Found out a bit more today.
He’s £10k short for a house deposit. He already has an MBNA credit card which does money transfers (like a balance transfer but straight into your account) with a £15k limit (he’s not used it for years).
It does 2 options. 3% fee with 0% interest or 0% fee and 6.9%.
He’s getting a £15k bonus in a month and will clear it. He reckons £10k will only cost £57.50 for the month.
But I’ve sent the fear of god up him saying that if they rescore it and see £10k outstanding on CC they could pull the offer.
Seems that he needs a mate to lend him 10k for a short time.He’s £10k short for a house deposit. He already has an MBNA credit card which does money transfers (like a balance transfer but straight into your account) with a £15k limit (he’s not used it for years).
It does 2 options. 3% fee with 0% interest or 0% fee and 6.9%.
He’s getting a £15k bonus in a month and will clear it. He reckons £10k will only cost £57.50 for the month.
But I’ve sent the fear of god up him saying that if they rescore it and see £10k outstanding on CC they could pull the offer.
I suspect the solicitor, broker and mortgage lender haven’t noticed the shortfall as it might be lost in the stamp duty amount? Worth noting the the solicitors often ask questions at the very, very last minute and may ask him to prove where the money has come from and the solicitors will often dob them in to the lender for loans etc.
Proving where it’s come from isn’t the issue (there’s no law against borrowing the deposit from a cc).
What he’s bothered about is the mortgage being pulled at the last minute.
I actually think he’s worrying about nothing as I’m fairly sure a credit search wouldn’t show any credit card balance for weeks (it’s not a new facility). That’s not to say I’m endorsing what he’s planning to do.
What he’s bothered about is the mortgage being pulled at the last minute.
I actually think he’s worrying about nothing as I’m fairly sure a credit search wouldn’t show any credit card balance for weeks (it’s not a new facility). That’s not to say I’m endorsing what he’s planning to do.
audi321 said:
Proving where it’s come from isn’t the issue (there’s no law against borrowing the deposit from a cc).
What he’s bothered about is the mortgage being pulled at the last minute.
I actually think he’s worrying about nothing as I’m fairly sure a credit search wouldn’t show any credit card balance for weeks (it’s not a new facility). That’s not to say I’m endorsing what he’s planning to do.
I am very aware of the worry about the mortgage being pulled…which is exactly why I said it from the perspective of a mortgage broker. The solicitor has a duty of care to the lender to report if any of the deposit has been borrowed…be that from a friend or a credit card. The solicitor would tell the lender and the lender would decline to lend or at the very least re-score the case and could decline on affordability and very likely to stipulate that none of the borrowed money can enter the transaction.What he’s bothered about is the mortgage being pulled at the last minute.
I actually think he’s worrying about nothing as I’m fairly sure a credit search wouldn’t show any credit card balance for weeks (it’s not a new facility). That’s not to say I’m endorsing what he’s planning to do.
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