payment of certain debts a condition of mortgage

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bond-007

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Is it standard practice to include a clause in a letter of mortgage offer requiring the solicitor to pay off credit card bills etc as a condition of the mortgage?
 
just to clarify does the lender want the solicitor to clear off your credit card debts from proceeds of the loan cheque he will receive. If so I suppose a lender can put in whatever condition they want in a letter of offer and it is up to you to either reject or object.
 
Correct. They want the solicitor to provide a receipt from the CC company within 3 days of drawdown which seems an awfully short period of time.

But I assume they cannot make you close the credit card account after clearing the debt? I was just querying , is it a standard practice item for mortgage lenders to insist on credit cards etc to be paid from the proceeds? Or is it just certain lenders that insist?
 
Lenders put in this condition a) because it was noted on the application that you wished to use the funds for this purpose b) to satisfy their minimum NDI requirements and therefore increase your mortgage eligibility. If you are servicing debt that will decrease your NDI further, they may make it a condition of the offer that the debts are cleared so you should be able to service the mortgage repayments more easily.

They can't make you cancel your credit card but sometimes after clearing off debt and getting a top up, its a good way to start to money manage more effectively. (I'm not saying this is your situation).
 
I had to do it with my mortgage. All I had owing was €800 on a credit card. Had to ring CC Company and get letter sent immediately when they received cheque. They did no bother, just stating the account balance was zero. Didn't have to cancel card.
 
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