2 min Read
03 Apr 2014

Written by Darren

I’m an Independent Financial Adviser and I’ve been in the industry since the 90’s

I have always had a particular interest in Investment, including Pensions.

FPC qualified since 1999 I have now been qualified at the new Diploma level since July 2011.

I totally support the FSA initiative of raising standards in general and building a code of ethics for advisers.

My only regret is that the move to fee based advice in 2013 may put off those who don’t usually seek the services of advisers, and sometimes these are the people that need us most.

That’s why I’m happy to offer my services to Money To The Masses!

More about Darren

Reader Q: Would switching my debts now to a 0% credit card adversely affect any mortgage application?

remortgage applicationReader Question

Hi

Would switching some of my debts now to a 0% credit card adversely affect any mortgage application when I come to re-mortgage my property later this year?

Thanks

Matthew

 

Darren's Response

Hi Matthew

Actually lenders view this type of thing quite well, as it is a sensible thing to do....provided they can see that the other credit card accounts are then physically closed down of course!

It also depends upon the new credit limit, and current spending pattern.

For example, if you currently spend £500 each month, and pay off only £200 so your balance increases each month, what will transferring achieve? You would still be getting deeper in debt, just not quite so fast

On the other hand if you effectively stopped the spending, (or pay off more than you spend) and your balances have been reducing over the last 12 months then the switch to 0% will help reduce them even faster.

The lender can then see affordability shouldn't be an issue, which by later in the year will be their main concern under the new MMR rules of course.

For mortgage affordability purposes they would look at the balance as a monthly commitment of 3/5% of the current balance (not the reducing balance).

I hope that helps

Darren Amos

Financial Planning Designer

If you would like to contact Darren for help with your financial affairs then click here.

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