Any financial advisors here? Re: mortgage/car/credit score

ShiWarrior

ShiWarrior

ShiWarrior

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Any financial advisors here?

I'm looking at my options now, as my current car is due MOT soon, so I'd like to sell it with a full year's MOT

I'm currently in the situation, where I'm waiting for house prices to drop around here but not currently looking for a first home yet

But if I was to purchase a car around 13K and got a credit card with 0% and pay it all off within 12 months or so

Would that be bad thing if I was to then look for a house and then put a deposit down ?

Although my credit score should be very very good (no borrowing money for the past 20 years sort of thing)

I want to maximise my chance of lowering my mortgage rate


I did find this article
But I need to be absolutely sure it won't affect me

Getting credit-ready before applying for a mortgage | Equifax UK

If you want to buy a property, it's a good idea to prepare your finances before applying for a mortgage. Here we look at different ways to get credit-ready.
www.equifax.co.uk
 
You don't need to have borrowed anything, but if your history is "light" it may boost your "score"
Remember its only credit agencies view, the mortgage company would look themselves anyway.

Its about your footprint. Seeing you don't miss payments, etc

With mortgages as long as you don't have any negatives, and you can put down a decent deposit that should be fine. They wont care if you paid off £200 a month on little loans.
 
As someone who has watched many YouTube videos I'm about as qualified as anyone to give financial advice. Do you need to sell your car or do you just want a new one? The sensible (but admittedly boring) option might be to keep it a while longer and focus on saving for the house - reducing the amount you need to borrow versus attempting to slightly lower the rate by taking on debt.
 
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General question: Is it true, that the "credit score" number you get from somewhere like Experian or Equifax is only a general guide for you, based on what they think is important?

If a lender is going to lend you money, do they use the number from experian or equifax, or do they calculate their own secret number?
 
"But if I was to purchase a car around 13K and got a credit card with 0% and pay it all off within 12 months or so"

Am i reading that right, that you want to get a 0% CC and buy a car on it for £13k ??

Firstly it's unlikely you'd be offered a CC with that much available credit as like you said you've no history of paying off loans,
and secondly using more than ~25% of your available credit can negatively effect your credit score
 
I've had multiple credit cards for years and never had one of them offer me £13k. I think £11500 is highest ones ever offered me.

I certainly wouldn't be doing what you're suggesting. I'd keep the car as long as possible and save towards mortgage.

Seems insane to do otherwise
 
Just checked and I've got about £50k credit available. I wonder if I maxed out all my cards this evening and put a deposit down on a nice house if I'll get away with it :D
 
Hedge said:
I've had multiple credit cards for years and never had one of them offer me £13k. I think £11500 is highest ones ever offered me.

I certainly wouldn't be doing what you're suggesting. I'd keep the car as long as possible and save towards mortgage.

Seems insane to do otherwise
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My last one was 12k.

That brings my total credit available to 59k.

This is a ridiculous amount as I earn 50k before bonuses. And 55-60k with.

But, as said, I have a long history of perfect payments. My first CCs were 2-3k limits.
 
Unfortunately as others have mentioned, credit lenders like a track record of payments. My credit score is 1000/1000 and thats not due to being responsible with borrowed money. Like most, I was quite reckless in my younger days with credit and wouldnt think twice about a last minute trip to Newyork using a credit card. Luckily, I never went more than a couple of grand so it was always manageable.
 
ShiWarrior said:
I want to maximise my chance of lowering my mortgage rate
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Just FYI your credit "score" won't do anything to maximize your rate. Your score is more about your credit worthiness, and may make a lender favour you of you've got a different set of circumstances.

The only way to lower your mortgage rate is based on the LTV - essentially you put in more of a deposit against what you're borrowing against. LTV works in brackets, so a 200k house with a 10k deposit is 95% LTV and will get you pretty much the worst rates on the market. A 40k deposit on that 200k house is 80% LTV and will get you much more favourable rates.

I think past 75 or 80 and the brackets widen - i.e. they don't keep dropping in 5% increments. I think after 75 it goes to 60 and then 40/under 40. The absolute best rates you can get will be in the last bracket - although realistically only people who are quite a number of years into their mortgage will be around there.
 
Diddums said:
Just checked and I've got about £50k credit available. I wonder if I maxed out all my cards this evening and put a deposit down on a nice house if I'll get away with it :D
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I don’t think maxing all ones cards out in the space of an evening is a big challenge.

Go for it…. Make sure you post pictures of the stuff you buy :D
 
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