Mortgage application question - credit card balance
Discussion
We are going to be buying our first home soon, and have a question regarding a credit card balance.
Current balance is £2000, with a limit of £2800, which is around 70% of available credit limit. I know lenders prefer this to be below 50%.
Otherwise, we shouldn't have an issue with our application, as we have good credit files, mortgage will only be 2.2 x our income, mortgage payments would be about 15% of net monthly income etc.
We could clear the card, or pay it down below 50%, but a property has come up which ticks every one of our boxes, and doing so would tip our deposit below 10%, which would take a month or two to top back up.
Head says wait, heart says go for it. So anyone had a problem with a credit card balance being 70% of available limit?
Current balance is £2000, with a limit of £2800, which is around 70% of available credit limit. I know lenders prefer this to be below 50%.
Otherwise, we shouldn't have an issue with our application, as we have good credit files, mortgage will only be 2.2 x our income, mortgage payments would be about 15% of net monthly income etc.
We could clear the card, or pay it down below 50%, but a property has come up which ticks every one of our boxes, and doing so would tip our deposit below 10%, which would take a month or two to top back up.
Head says wait, heart says go for it. So anyone had a problem with a credit card balance being 70% of available limit?
JB8 said:
We are going to be buying our first home soon, and have a question regarding a credit card balance.
Current balance is £2000, with a limit of £2800, which is around 70% of available credit limit. I know lenders prefer this to be below 50%.
Otherwise, we shouldn't have an issue with our application, as we have good credit files, mortgage will only be 2.2 x our income, mortgage payments would be about 15% of net monthly income etc.
We could clear the card, or pay it down below 50%, but a property has come up which ticks every one of our boxes, and doing so would tip our deposit below 10%, which would take a month or two to top back up.
Head says wait, heart says go for it. So anyone had a problem with a credit card balance being 70% of available limit?
I think he really over thinking this or listening too much to Martin Lewis et al.Current balance is £2000, with a limit of £2800, which is around 70% of available credit limit. I know lenders prefer this to be below 50%.
Otherwise, we shouldn't have an issue with our application, as we have good credit files, mortgage will only be 2.2 x our income, mortgage payments would be about 15% of net monthly income etc.
We could clear the card, or pay it down below 50%, but a property has come up which ticks every one of our boxes, and doing so would tip our deposit below 10%, which would take a month or two to top back up.
Head says wait, heart says go for it. So anyone had a problem with a credit card balance being 70% of available limit?
Would paying it off be slightly better for the lender? Yes.
Do you need to bother reducing the balance to secure mortgage? Not from what you've said so far.
Ps: thanks for the comments guys!
JB8 said:
We could clear the card, or pay it down below 50%, but a property has come up which ticks every one of our boxes, and doing so would tip our deposit below 10%, which would take a month or two to top back up.
Surely it's going to take at least a month or two for the purchase to go through, by which time you can have topped up your deposit fund to the required level?schmunk said:
Surely it's going to take at least a month or two for the purchase to go through, by which time you can have topped up your deposit fund to the required level?
In reality that would probably be the case if we paid it down, but there's a small risk we'd be short come completion time. Thanks for the comments everyone, I do believe I may well be over thinking things here.
I've got an appointment with a mortgage advisor at my bank next week, may well drop Sarnie a PM following this.
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