Mortgage documentation required for credit card application and mortgage payments through credit card

[yojohnny]

Since I started churning I have been renting and never had to show any evidence of money spent on rent.

I will be settling on a property (PPOR) in a few weeks; I stopped churning when I started to look for a place to buy so I only had one credit card.

I am hoping to apply for another credit (or several) before settlement so I can push "new house" spending through it.

A few questions:
1a) What sort of mortgage documentation is typically requested when you own a property and are applying for a credit card, if any?
1b) I assume a mortgage shows up on your credit report. At what point would this show up? After settlement or possibly in the weeks before?
2) I pushed my rent through my credit card using Beem It and more recently Zip. What's the chance I'll be able to push mortage payments through Zip (using BPAY)? I assume my odds are zip!!! I can't justify the fee's for the non-free options.

 

[Dr Ralph]

A few questions:
1a) What sort of mortgage documentation is typically requested when you own a property and are applying for a credit card, if any?

Usually no documentation is requested. However, I have sometimes been asked for the mortgage contact/latest statement.

1b) I assume a mortgage shows up on your credit report. At what point would this show up? After settlement or possibly in the weeks before?

Possibly before settlement. It may show as a credit hit.

2) I pushed my rent through my credit card using Beem It and more recently Zip. What's the chance I'll be able to push mortage payments through Zip (using BPAY)? I assume my odds are zip!!! I can't justify the fee's for the non-free options.

Haven't tried this. But I don't think it will work.

 

[yojohnny]

Usually no documentation is requested. However, I have sometimes been asked for the mortgage contact/latest statement.

Possibly before settlement. It may show as a credit hit.



Haven't tried this. But I don't think it will work.

Thanks for the answers. Will see how I go.

 

[N860CR]

I don’t think I’ve ever been asked to show mortgage documents. They just take repayments at your word (the bank can see your mortgage limit but not the repayments). Remember the main decider in approvals is your incoming/outgoing funds. Obviously, if you apply for a card with the bank your mortgage is with then they can see it.

Your mortgage will appear on your credit file after settlement. A good time to apply is on settlement day before it’s hit your credit file.

 

[levelnine]

A good time to apply is on settlement day before it’s hit your credit file.

What about after mortgage is approved and before settlement? Or might recent inquiries make your bank skittish at settlement? Do they even look at your file again after they've approved your loan?

 

[UP4014]

You might be asked for a mortgage statement, I've not been asked for more than that. I guess to see you make the payments and aren't behind and it's likely you largest outgoing.

 

[N860CR]

What about after mortgage is approved and before settlement? Or might recent inquiries make your bank skittish at settlement? Do they even look at your file again after they've approved your loan?

You’d be very unlucky, but I wouldn’t tempt fate on property settlement. For what it’s worth, I applied for 4 credit cards on settlement day about a year ago and all got approved (two without even asking for payslips).

 

[Gremlin]

Depending on how 'close' you are on your mortgage approval, certain things may be re-verified immediately prior to settlement. If you've pushed the boundaries on your mortgage, I wouldn't tempt fate.

 

[yojohnny]

Thanks for the additional info. It had been several months since my last (except for one) credit card closure so I was keen to get 'back in the game'. In the end I was approved for 5 that I applied for. I just waited until post-mortage approval, but pre-settlement and rolled the dice and it's payed off, just in time to push a few K of Black Friday spending through and a few final weeks of rent. Citibank messed me around, I threw the "AFCA" line out there and then magically, the 5th card was approved a week later.

 

[levelnine]

Thanks for the additional info. It had been several months since my last (except for one) credit card closure so I was keen to get 'back in the game'. In the end I was approved for 5 that I applied for. I just waited until post-mortage approval, but pre-settlement and rolled the dice and it's payed off, just in time to push a few K of Black Friday spending through and a few final weeks of rent. Citibank messed me around, I threw the "AFCA" line out there and then magically, the 5th card was approved a week later.

You applied for 5 new credit cards pre-settlement?!

I take it your bank didn't do another credit check just prior to settlement then?

 

[yojohnny]

You applied for 5 new credit cards pre-settlement?!

I take it your bank didn't do another credit check just prior to settlement then?

I've just made the assumption that they wouldn't; I can't see why they'd do second one in a ~5 week period. Though I am borrowing a very small amount relative to income and if it came to it and they told me I'd have to close them all, I would of course.

 

[Gremlin]

I've just made the assumption that they wouldn't; I can't see why they'd do second one in a ~5 week period. Though I am borrowing a very small amount relative to income and if it came to it and they told me I'd have to close them all, I would of course.

Ummm...

Maybe because it's their money and they're lending you what is, in effect, a life changing amount of money?

Or because buying a house is a very expensive time with lots of ancillary, and perhaps unexpected, expenses that need to be covered beyond simply the house price, stamp duties and transfer fees?

Or because you've asserted what your financial position is at approval and you've almost certainly signed a legally binding contract to inform them of any material changes to your financial position, such as applying for more credit, between approval and settlement?

Or because it's literally written into the contract you've signed that they reserve the right to do so?

You do understand that what you've risked is not that they'll come back to you and ask you to close your credit cards, right? You're risking that they will instead come back and decline to fund your home loan because you've breached your disclosure obligations to them. Thus potentially leaving you in breach of contract with your seller, who could take your deposit and claim damages against you. Unless you have sufficient cash to buy the property outright, you are either very brave, very naive, or very, very stupid!

 

[yojohnny]

Ummm...

Maybe because it's their money and they're lending you what is, in effect, a life changing amount of money?

Or because buying a house is a very expensive time with lots of ancillary, and perhaps unexpected, expenses that need to be covered beyond simply the house price, stamp duties and transfer fees?

Or because you've asserted what your financial position is at approval and you've almost certainly signed a legally binding contract to inform them of any material changes to your financial position, such as applying for more credit, between approval and settlement?

Or because it's literally written into the contract you've signed that they reserve the right to do so?

You do understand that what you've risked is not that they'll come back to you and ask you to close your credit cards, right? You're risking that they will instead come back and decline to fund your home loan because you've breached your disclosure obligations to them. Thus potentially leaving you in breach of contract with your seller, who could take your deposit and claim damages against you. Unless you have sufficient cash to buy the property outright, you are either very brave, very naive, or very, very stupid!

lol. What a waste of time that was.

 

[Gremlin]

lol. What a waste of time that was.

Stupid is as stupid does...

 

[levelnine]

Unless you have sufficient cash to buy the property outright, you are either very brave, very naive, or very, very stupid!

I do wonder how often this risk materialises though. There are plenty of risks in life, most never come to pass.

Would be very interesting to get some internal insights in how often banks run another credit check.

 

[Quickstatus]

do wonder how often this risk materialises though

Something like When it comes to financing a car loan or refinancing the mortgage

 

[Gremlin]

I do wonder how often this risk materialises though. There are plenty of risks in life, most never come to pass.

Would be very interesting to get some internal insights in how often banks run another credit check.

I don't know the ins and outs of it, but MrsG and I took out a new home loan last year. All our data was verified at loan approval. We were told to expect that they would reverify just prior to settlement. I know for certain that salaries were reverified. I have no reason to believe that credit wasn't reverified. This was with NAB. YMMV.