What option would look best? Credit card or loan?

stuart2588

Hi

My fiancee and myself are hoping to buy a house in 2 years time. At present we have one loan totalling 369 per month which is due to end in 3 years.

We also have credit card debt amounting to 6500. We make payments of £200 and sometimes £300 a month depending upon circumstances as I am self employed.

My question is....

Would a mortgage lender prefer us in 2 years time to have 2 loans and no credit card debt. ( Ie we would take out another loan to pay off the credit card..Maybe take this loan out over 3 years)??

Or would they prefer us to have the one loan of £369 per month and a few thousand on a credit card?

Thanks in advance.

Stuart

Rob71

Ideally they will want you to have neither a loan nor a credit card balance!

I suspect they don't differentiate between loans or cards - they just see the outstanding balance and available credit limit.

Use the two years to try and reduce the debt as much as possible without making yourself skint/miserable - I'm guessing you're working on building up a deposit as well.

Check out the various other forums on here to work out how to reduce your debt more quickly by switching it to credit cards/loans with a cheaper interest rate, that kinda thing.

poppy10_2

Where are you going to get your deposit from?