Close line of credit before remortgage?

[Eamonnn]

Current situation:

House value ~£375k
Outstanding balance £150k
LTV 40%

Remortgage due in Q1 2021

Looking to borrow an additional ~£100k to fund an extension, pushing LTV up to 66.6% based on same value.

Current credit cards:

1) Limit £16k, monthly spend £1k, balance cleared by DD

2) Limit £4k, monthly spend £750, balance cleared by DD

3) Limit £12k, balance of £10k for 2 years at 0% but just cleared in full

Should I keep card 3) open with a zero balance, or close it? What would be your advice?

Thanks, Eamonnn

[Sarnie]

Just leave them...............

[Julia121]

Sarnie said:

Just leave them...............

^^This. Wallet tidy ups feel like a good idea but aren't

[Eamonnn]

Thanks Liam & Julia

Eamonnn

[SJfW]

Julia121 said:

Sarnie said:

Just leave them...............

^^This. Wallet tidy ups feel like a good idea but aren't

Can I ask why?

I understand that having un-used credit cards isn’t necessarily a bad thing, although plenty of people used to make out it was.

Just curious why a wallet tidy up would actually be a bad idea?

[AC43]

Keep them but with low or zero balance.

Mortgage providers need to know (a) how much unsecured lending there is and (b) what the monthly cost is.

They'll often insist the first part of a mortgage is used to pay off any credit card balances.

You can have as many as you like at zero balance.

[Killer2005]

AC43 said:

Keep them but with low or zero balance.

Mortgage providers need to know (a) how much unsecured lending there is and (b) what the monthly cost is.

They'll often insist the first part of a mortgage is used to pay off any credit card balances.

You can have as many as you like at zero balance.

They tend to take credit cards at a flat 3% (may depend on lender).

They wouldn't insist on anything being repaid unless were advised it was going to be. Unless perhaps a mortgage advisor working for the lender gave that advise.

[Julia121]

SJfW said:

Julia121 said:

Sarnie said:

Just leave them...............

^^This. Wallet tidy ups feel like a good idea but aren't

Can I ask why?

I understand that having un-used credit cards isn’t necessarily a bad thing, although plenty of people used to make out it was.

Just curious why a wallet tidy up would actually be a bad idea?

What lenders are looking for is 'are you good for the money?'. That includes covering all their upfront setting up costs of the account. They're looking for tenure, how long you usually keep cards open so they can reasonably expect to recover their costs and probably sell you further products down the line. Sarnie I believe is a mortgage broker and would find it more difficult to persuade a lender to lend a client money if the lender sees that the client is closing accounts before they become good for the money. Even if they've passed that stage you're in a stronger negotiation position as you can show you've passed three other lender's credit checks rather than just two.