Save for a deposit or pay off debt entirely?

HOORA

Hi,

I have a 6000 pounds loan outstanding. Currently to be paid off over next 28 months at 233pm. Should I transfer the 6000 to 0% finance cards for one year and throw 500pm at it and clear it in one year...?

Or...should i continue to modestly pay it off, but save and add it to 5000 my father said he would lend me for a deposit for a house? and then on mortgage repayments.

I would be saving all that interest being charged at 7.7pa. Although I think Ive already paid off the interest in 6 months as the loan was for 6000 originally plus interests over 36 months.

what would be your advice? I want to get on the house ladder but should i wait until debt cleared totally(i have no other debts).

after a year of living in the property, with one lodger paying rent, I will be moving with work, and would wish to rent out the property.

obviously mortgage rates are cheaper than 7.7, but cards are cheaper in the short term than mortgage rates.

what do i do?

*Sparkle*_3

I would say definately pay off your debts first then you'll be in a excellent position!
If you dont pay off your debts and get a mortgage, your circumstances might change and then you wont be able to pay off your debts.

So if you can pay off your debts first, good luck

SaveMoreMoney

I'd go for hitting those debts off first. Once you get property, you always spend more than you think you will............loads of little things you buy as you 'house build'.

Get sorted financially and then you will enjoy your property far more and it would be awful if you got the property but couldn't afford to buy anything as your income is paying off debts. Then you might get in the dilema of paying off debts or buying home stuff and your debt might just increase !!

marco_79

Defo the debts first mate. Speaking from experience thats the way we did it esp if you can afford to clear it in a year.

HOORA

but do u think the avearage 100k house will rise by more than 6000 in the coming year? then it would make sense to get a mortgage...? yes?

Doozergirl

I certainly wouldn't bet on it. Property is no longer a cash cow.

Buy a house because you want a home, not because you think it's going to make you money for nothing.

Rave

HOORA wrote:

but do u think the avearage 100k house will rise by more than 6000 in the coming year? then it would make sense to get a mortgage...? yes?

I reckon there's almost no chance that house prices will increase by 6% this year- they're far more likely to drop 6%. Definately get the debt onto a 0% card and clear it as fast as you can- then start saving for a deposit.

tomstickland

A poll of experts in the Times money section showed a range of predictions, though most were in the -2.5% to + 2.5% sort of area IIRC.

My own observations of the £100K and below market in Gloucester suggest a fall.