a little windfall

debtfreein4years

my oh and i are due to come into some money in the next few months. we are looking at approx 70K, we have the below debts

my cc - 500
my overdraft - 800
joint overdraft - 300
my loan - 8000
his loan - 6500
car loan - 12000

savings - 5000

we are planning on using 55K as a deposit for a house, but im not sure if we should totally clear the debt first. im thinking clear everything apart from my loan as thats up in 3 years or would it be better just clearing it all and then banking the 850 a month we pay towards debt?

extremly confused as with interest rates the way they are not sure what to do. i want to save it and pay the debt off bit by bit and blitz it when we go to put an offer in on an house, oh wants to blitz debt and then save.

thanks

JemJam

Think i'd opt for the blitzing the debt then saving, or at least blitzing the highest interest debt first; I think its always better to start off with a clean slate when looking for such a big future investment like houses etc.

paulmx3

with interest rates on savings so low id be inclined to clear all the debt then save what you can on top of whats left,you will still be in a nice deposit position which will be rising and you will ave that lovely warm feeling of being debt free.

ad9898_3

Clear your debts, without question this is the way forward. My concern for yourself as is the case with lots of people on this board, is to get away from the addiction of buying consumer tat.

Anything you buy has a novelty value, usually of no more than 2 weeks, once this time has passed, you go out and replace the 'novelty feeling' by buying something else, this vicious circle continues until you find yourself in trouble.

You have '6' different tyes of debt, clear them, then concentrate on not making the same mistakes again. Once you break the 'novelty consumer tat' vicious circle, you will feel liberated.

There is a lot more to life than 'buying'. Just stop, and feel better.;)

hypno06

I would definitely say clear the debt and put the rest towards your deposit. If you are completely free of debt you will

a) be seen to be a better mortgage prospect for lenders
b) be free of monthly payments, allowing you to save as much as you can
c) be more in control - you will control your money, not your money controlling you.

Don't risk keeping "just one debt" - it will either spiral into being two, then three, then back to square one.......and it could well go against you when the lenders work your affordability and check your credit rating.

good luck!