Credit cards or loan better for mortgage approval?

[strath44]

Hi folks, from a likelihood to lend scenario etc which is better having debt on credit card or on a loan?

I have a couple of credit cards which are on pretty poor interest rates and no offers available on them. However I can get a loan at a good rate to clear them and save a fair chunk on interest based on the speed I could pay them back at, therefore I would like to do this but as we need to redo our mortgage in 6 months I’m wondering what’s best?

[Killer2005]

Lenders usually take credit card balances at 3% so if the monthly payment on the loan works out lower then probably the better way.

[BeeBopp]

Different lenders take a different approach to the % of the outstanding credit card amount - Halifax took a v pessimistic view a couple of years ago, for example.

A loan repayment is different insofar as its a fixed amount. Getting a loan now to clear the cc debt wont affect your creditworthiness when it comes to mortgage time in 6 months. How it affects your affordability for the mortgage is a different matter, and we'd need more info to advise better.

[geeks]

Sarnie would be the man to ask here, pop into this thread, he usually lurks there

https://www.pistonheads.com/gassing/topic.asp?h=0&...

[strath44]

Thanks folks much appreciated

[Sarnie]

strath44 said:

Hi folks, from a likelihood to lend scenario etc which is better having debt on credit card or on a loan?

I have a couple of credit cards which are on pretty poor interest rates and no offers available on them. However I can get a loan at a good rate to clear them and save a fair chunk on interest based on the speed I could pay them back at, therefore I would like to do this but as we need to redo our mortgage in 6 months I’m wondering what’s best?

It's hard to say whats the best without having the numbers to hand..............the best one is the one that has the smallest impact on your affordability, so the one with the lowest payment.........but lenders won't go off the credit card payment that you actually pay they will take a percentage (anywhere from 2-5%) of the balance........on that basis, it often works out that a loan is better when calculating affordability.......