Reply to: Shifting Mortgage to credit card

[jmo21]

Not only credit card debt, if you have a 15k limit with a zero balance you effectively still have a 15k debt in their eyes.

Where can I read about this, that's mental.

[doodab]

Ok so for 5k that is £200/year which is £400 over the 2 year duration. £400 extra in my pocket is worth the 10 mins it will take me to do the transfer.

In addition to that it is going to bring down the interest rate I will have to pay to the bank due to the LTV. there we are talking about much larger amounts of money.....

Well it's £400 less the £145 transfer fee. Personally I would pay off the existing debt on there, which reduces minimum payment and improves your cashflow. An extra £50 in your pocket every month for two years is pretty handy, can be used to pay down the debt or your mortgage.

[NorthWestPerm2Contr]

Doesn't this mean your debt is growing ever larger as you are not paying the interest and providers generally charge 3% of the outstanding balance when you switch to a 0% offer - you'er not paying but it's looming ever larger.

So companies such as RBS, MBNA etc require minimum payment of 1%/month. So generally you will pay off in the region of 20% over 2 years. The fee was only 2.9% so you are still paying off a chunk of it. Companies such as Barclaycard require 2% minimum payment, so you will be paying it off twice as fast as in the above example....

[d000hg]

Been transferring credit cards since my uni days. Always have a direct debit set-up with minimum payment. Never had a late payment. When 24 months is over I will simply transfer to another credit card - as I have been doing for many years.

Doesn't this mean your debt is growing ever larger as you are not paying the interest and providers generally charge 3% of the outstanding balance when you switch to a 0% offer - you'er not paying but it's looming ever larger.

[gingerjedi]

WHS.

They will pickup all loans and credit card debts and subtract that from any equity and deposit on a mortgage, as this debt is included along with the mortgage debt when calculating LTV.

So, really, apart from a few hundred quid saved (do it for that purpose if it makes you happy), there's no point.

Not only credit card debt, if you have a 15k limit with a zero balance you effectively still have a 15k debt in their eyes.

[shaunbhoy]

You sad pathetic old man.

Alexei, there is more to life than collecting Meerkat puppets you know.

[AtW]

You tell him how many HDD you have now.

Lost count, but should be well over 1000 now, I am about to place order for 80 more today

Oh wait

[DimPrawn]

You sad pathetic old man.

You tell him how many HDD you have now.

[AtW]

I've moved onto collecting Avios, Hilton Points and BA miles now.

You sad pathetic old man.

[MarillionFan]

Sounds like MF aka "Credit Card Tart" will never get a mortgage

I've moved onto collecting Avios, Hilton Points and BA miles now.

It's 12500 points for a case of 12 bottles of wine.
I've got 1/2 million points, 20 free stays at a Hilton and six business class flights anywhere in the world

(Pity i don't have anytime to do any of 'em :-( )

[MarillionFan]

Stoozed for donkeys years. Estimate that I've made on average £1200 or so every year since around 2000. Used to put a lot of my shop stock purchases on cash back cards then balance transfer them.

Having had an offset mortgage at initially 6% it was a great way to get cheap money. For a while transfers were interest free so it literally was money for nothing. Then the fees increased 1,1.5 and these days 2.9%

Now it's not become worthwhile for me and I've now been reducing down my cards. I had around £48k on cards last year but now you cannot get more than the transfer fee I've reduced to £20k and ill pay the last two off as opposed to transferring them on renewal.

[jmo21]

The point is, before, that would see your credit check marked as good, as you had the debt, and were repaying it on time. However, now, it is looked at different i.e. he has more debt.

can yuo appreciate the difference in how the two debts are now looked at? One positively, the other negatively.

Makes sense now, but again it's not like it's 40 grand or some large amount is it?

any links I can read?

[Old Hack]

Surely clearing your debts before applying for a mortgage sorts this worry out?

It's not like I'm carrying 40 grand at a time.

Repaying 5k on 0% deal over time is hardly the same as being in massive debt.

I picked up this technique from Martin Lewis and I don't his site tells you this is a problem (or certainly, it didn't in the past!!)

The point is, before, that would see your credit check marked as good, as you had the debt, and were repaying it on time. However, now, it is looked at different i.e. he has more debt.

can yuo appreciate the difference in how the two debts are now looked at? One positively, the other negatively.

[jmo21]

Nothing wrong with that game, just don't expect the mainstream mortgage lenders to turn a blind eye to it, that's all.

Surely clearing your debts before applying for a mortgage sorts this worry out?

It's not like I'm carrying 40 grand at a time.

Repaying 5k on 0% deal over time is hardly the same as being in massive debt.

I picked up this technique from Martin Lewis and I don't his site tells you this is a problem (or certainly, it didn't in the past!!)

[BolshieBastard]

I have a couple of credit cards on interest free and it just makes no sense for me to pay them off - I have 2 credit card on 24 month 0% for a 2.9% balance transfer fee..... That has got to count as pretty much free money.... I had 2 get the 2 to pay off an existing one. I have a few thousand spare on one of them and was considering whether it would be worthwhile shifting a small amount of my mortgage onto it - it may also bring me closer to 70% LTV which will make my re-mortgage cheaper...

Has anybody else found credit cards very useful in such circumstances?

Depends who your card issuer is. Many card issuers have got wise to those just doing BT's and leave it sitting at zero percent interest.

Many are now profiling card accounts and upping the minimum monthly payment to 25 quid or 1% of the balance. They also reprice the interest rates on spending, sign up or else no further spending on your car(s).