Remortgaging questions
Discussion
I have a few credit cards which are still open but have no balance on, my mortgage discount period ends next year so will be looking to remortgage. Is it best to close the credit cards, to reduce the amount of available credit, or to leave them,.to show we have credit available that we don't use?
Next question... we are going to be building a large extention (fingers crossed, pending planning) which may well still be be built when we are expecting to remortgage. Is it going to be an issue remortgaging a property which is under going building work? Will we have to wait until after the extention is finished to remortgage, which will give us a better LTV anyway?
Next question... we are going to be building a large extention (fingers crossed, pending planning) which may well still be be built when we are expecting to remortgage. Is it going to be an issue remortgaging a property which is under going building work? Will we have to wait until after the extention is finished to remortgage, which will give us a better LTV anyway?
We just done this - well additional borrowing for building work, our existing deal is up for renewal next year. We went with our existing lender as the fixed deals from Barclays are pretty good at present, sub 1.3% for 5 year fixed, sub 1.5% for 7 years, and sub 2% for 10 years.
I was told by Barclays - They didn't care how many credit cards I have (5 in total), but they did want to know the outstanding balance on them, even if they are paid off in full every month.
Regarding the LTV and building work, they didn't seem to care, but they weren't going to change the LTV based on 'future value'. They were fine with me borrowing for building work based on the original valuation. They have the option to send out some one to revalue the house if needed, but because we said we weren't changing the original value of the house they approved the lending over the phone.
From the phone call to getting the official 'offer' in the post took 10 days, once we sign the money will be in the bank within 5 - 10 days I was told, so surprisingly smooth and painless.
I was told by Barclays - They didn't care how many credit cards I have (5 in total), but they did want to know the outstanding balance on them, even if they are paid off in full every month.
Regarding the LTV and building work, they didn't seem to care, but they weren't going to change the LTV based on 'future value'. They were fine with me borrowing for building work based on the original valuation. They have the option to send out some one to revalue the house if needed, but because we said we weren't changing the original value of the house they approved the lending over the phone.
From the phone call to getting the official 'offer' in the post took 10 days, once we sign the money will be in the bank within 5 - 10 days I was told, so surprisingly smooth and painless.
edthedead said:
I have a few credit cards which are still open but have no balance on, my mortgage discount period ends next year so will be looking to remortgage. Is it best to close the credit cards, to reduce the amount of available credit, or to leave them,.to show we have credit available that we don't use?
Next question... we are going to be building a large extention (fingers crossed, pending planning) which may well still be be built when we are expecting to remortgage. Is it going to be an issue remortgaging a property which is under going building work? Will we have to wait until after the extention is finished to remortgage, which will give us a better LTV anyway?
I’m fairly sure it’s better to have unused credit than none at all as it proves you can get it but don’t need it.Next question... we are going to be building a large extention (fingers crossed, pending planning) which may well still be be built when we are expecting to remortgage. Is it going to be an issue remortgaging a property which is under going building work? Will we have to wait until after the extention is finished to remortgage, which will give us a better LTV anyway?
alistair1234 said:
edthedead said:
I have a few credit cards which are still open but have no balance on, my mortgage discount period ends next year so will be looking to remortgage. Is it best to close the credit cards, to reduce the amount of available credit, or to leave them,.to show we have credit available that we don't use?
Next question... we are going to be building a large extention (fingers crossed, pending planning) which may well still be be built when we are expecting to remortgage. Is it going to be an issue remortgaging a property which is under going building work? Will we have to wait until after the extention is finished to remortgage, which will give us a better LTV anyway?
I’m fairly sure it’s better to have unused credit than none at all as it proves you can get it but don’t need it.Next question... we are going to be building a large extention (fingers crossed, pending planning) which may well still be be built when we are expecting to remortgage. Is it going to be an issue remortgaging a property which is under going building work? Will we have to wait until after the extention is finished to remortgage, which will give us a better LTV anyway?
We had a number of unused CCs when we recently went through the mortgage process, total limits something like £50k but regular utilisation of c£2k/mth on the AmEx.
Didn’t seem to make a difference at all.
I would however be cautious about closing loads off in the run up to a mortgage application.
Didn’t seem to make a difference at all.
I would however be cautious about closing loads off in the run up to a mortgage application.
Wheatsheaf said:
I've never had a credit card and my credit rating is 999 on Experian. I infer from this that it's not so much the presence or otherwise of credit cards but more how one manages one's finances in general.
Don't confuse the score from a Credit Reference Agency with the scoring a lender uses when deciding to lend to you or not.I've had plenty of clients who have zero credit commitments and failed mortgage lending credit scorings because they have nothing on their files to assess.
Having nothing on your file is only one rung up from having adverse data on your credit file.......
Sarnie said:
Wheatsheaf said:
I've never had a credit card and my credit rating is 999 on Experian. I infer from this that it's not so much the presence or otherwise of credit cards but more how one manages one's finances in general.
Don't confuse the score from a Credit Reference Agency with the scoring a lender uses when deciding to lend to you or not.I've had plenty of clients who have zero credit commitments and failed mortgage lending credit scorings because they have nothing on their files to assess.
Having nothing on your file is only one rung up from having adverse data on your credit file.......
Why would a credit reference agency that a mortgage lender uses have a vastly different score to Experian?
Anything that we (or others in the same boat) should or should not do in the 3-6 months prior to a mortgage application? Eg use credit cards more? Use them less? Anything else?
JapanRed said:
Interesting this Liam. As you know we will be buying a house later this year and taking on a bigger mortgage. Both our credit scores are 999 (Experian) as of today.
Why would a credit reference agency that a mortgage lender uses have a vastly different score to Experian?
Anything that we (or others in the same boat) should or should not do in the 3-6 months prior to a mortgage application? Eg use credit cards more? Use them less? Anything else?
You should use them more.Why would a credit reference agency that a mortgage lender uses have a vastly different score to Experian?
Anything that we (or others in the same boat) should or should not do in the 3-6 months prior to a mortgage application? Eg use credit cards more? Use them less? Anything else?
If you have nothing on your credit file at all, a lender has no knowledge how you will handle paying what will be a significant debt.
If you have mortgages then don't worry.
But if you a FTB, with zero debt or history of credit commitments then we have seen clients fail AIP's because there is simply nothing on their credit files.
In theory, these should be the clients that lenders should be falling over themselves to lend to, but the reality is different if you can't pass the credit score....
JapanRed said:
Interesting this Liam. As you know we will be buying a house later this year and taking on a bigger mortgage. Both our credit scores are 999 (Experian) as of today.
Why would a credit reference agency that a mortgage lender uses have a vastly different score to Experian?
Anything that we (or others in the same boat) should or should not do in the 3-6 months prior to a mortgage application? Eg use credit cards more? Use them less? Anything else?
Lenders typically use bespoke scorecards developed by their credit risk departments. Credit reference data is used heavily in these scorecards, with overlays from application data, and records of previous dealings (if relevant). There are other data sources that lenders can use in addition to these, but they are not as common place. Why would a credit reference agency that a mortgage lender uses have a vastly different score to Experian?
Anything that we (or others in the same boat) should or should not do in the 3-6 months prior to a mortgage application? Eg use credit cards more? Use them less? Anything else?
Within the credit reference data, the generic bureau score (which is only sometimes the score that consumers can see in the consumer portals) is not always terribly predictive, and therefore the other data points re account conduct are more heavily weighted. Where there is insufficient data about credit history, this is considered a thin credit file and typically mainstream lenders will find thin file humans too risky to lend to because they don't have enough data to form a view on their risk.
Hi
Just looking at remortgaging and having been on 2 year fixed deals for the last 8 years or so, the 5 year deals are attractive. Typically 1.19% + £999 fee for <60/65% LTV.
What I was considering is whether to see if we could get a chunk of cash from the new lender now ahead of perhaps moving house in the coming 2-3 years.
My concern being that if interest rates do move up in the next couple of years and we wanted to do a house move then if we go to the lender later on asking for a further amount to borrow on the existing 5 year deal when equivalent deals may have moved up they're going to say 'no' as why would they want to lend at what then maybe sub-market rates?
Amounts involved would all remain within the LTV for the loan. Online forms indicate that lender would currently lend us comfortably more that our existing loan plus any cash up front.
Do we need to have a good 'story' for the lender to take this approach? I imagine they don't want to hand a chunk of cash over without having something on record even if the borrower does then go off and spend it on something else. To a certain extent they shouldn't care too much if it's all deemed affordable and well within LTV. Upfront school fees is one idea.
Thanks!
Just looking at remortgaging and having been on 2 year fixed deals for the last 8 years or so, the 5 year deals are attractive. Typically 1.19% + £999 fee for <60/65% LTV.
What I was considering is whether to see if we could get a chunk of cash from the new lender now ahead of perhaps moving house in the coming 2-3 years.
My concern being that if interest rates do move up in the next couple of years and we wanted to do a house move then if we go to the lender later on asking for a further amount to borrow on the existing 5 year deal when equivalent deals may have moved up they're going to say 'no' as why would they want to lend at what then maybe sub-market rates?
Amounts involved would all remain within the LTV for the loan. Online forms indicate that lender would currently lend us comfortably more that our existing loan plus any cash up front.
Do we need to have a good 'story' for the lender to take this approach? I imagine they don't want to hand a chunk of cash over without having something on record even if the borrower does then go off and spend it on something else. To a certain extent they shouldn't care too much if it's all deemed affordable and well within LTV. Upfront school fees is one idea.
Thanks!
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