Powered by Yahoo! Answers

can you hide a credit card debt a mortgage application?*

im not trying to be decietful, but im applying for a mortgage and im worried owning up to owing £14k will affect my chances. i can afford the payments. i checked myself out on 3 credit ref agencies and the debt was not there. and i have been checked out by bank as i have a mortgage in principle. just filling out form now when my form goes to the underwriter, can this debt be found? it is not on my bank statements as i withdraw the amount and my wife pays it through her account for me is there any other way anyone can find it? i have found a house i want theres no way i can afford to clear the debt and it would take years. i dont want to wait any longer as i would be too old then for a mortgage and said i can make repayments on both

Answers:

1) If the three credit agencies don't have it,it will not show up,most of the time they only use one credit agency

2) You're not trying to be deceitful? Come on, now!

3) This isn’t the advice you want to hear, but I think it is good advice none the less. Your credit card debt will have a high interest rate, probably much higher than your mortgage, and the interest you are earning on any savings you have. I would imagine it would be at least 10% a year. This means that this debt is costing you at least £1,400 a year in interests which is quite a lot. From a financial point of view, you would be much better off paying off your credit card debt before investing in property. This would save you the £1,400+ in interests that this debt is costing you each year. You should consider waiting until you have paid off this debt, to take out a mortgage. It will be worth the wait, because once you have not got the credit card installments to pay, you will be able to afford larger mortgage installments, and to pay off the loan a lot quicker. This will save you a lot of interest. Take this example to see my point. A mortgage of £100,000, and an interest rate of 5% 1)You pay £700 a month on the mortgage and £300 to the credit card. Iin total you would take 19 years to repay the mortgage, and in total pay £153k – that’s £53k interest over the life of the loan. 2)If once you have paid of the credit card you are able to pay £1000 a month on the mortgage, you would take only 11 years to repay the loan and it total pay £131k that is a £22k saving in interests. This is only an example, but it shows how paying off the credit card first could save you a lot of money on your mortgage. If your mortgage is for a greater amount or you will make smaller repayments - the saving will be greater than in the example. Do you have any savings? To apply for a mortgage it is necessary to have some money saved up. Having savings also shows the banks that at the moment you have excess cash, and will be able to take on new commitments such as the mortgage repayment. The banks rightly believe that someone who in the past has not been able to save, will not be capable of taking on monthly mortgage repayment. If you do not have the means to pay-off the debt, maybe you should not be considering entering into a mortgage. In order to accrue this debt, you have obviously been living beyond your means, and unless recently some drastic change has happened (new job, promotion- other significant increase in your income) this will be the case in the future. More so when on top of credit card repayments, you have to meet mortgage repayments. The bank has a duty of care towards their customers, to provide them with good advice, and only grant mortgages to people who will be able to pay them. To give you good advice they need all the information about your financial situation. The bank may not be able to track your credit card debt now. But if in the future you don’t make the payments, you can bet they will. And as with-holding this information on the application is deceit, you would be liable to them. Sorry to pour cold water on your plans, but I think that you are taking a great risk of taking out more debt than you are able to afford, especially since interest rates are as low as they can go right now, and from here on can only go up. In the recent past, banks have been to eager to lend money to customers who could not afford repayments, and many people now risk losing their homes because of this. Don’t get out of your depth because the consequences will be dire.

*The answers on this page are supplied by users of the Yahoo! Answers forum or by visitors to this site. CreditOptions does not necessarily endorse or agree with the answers provided.