First Time Buyers... Do I?

harding1985

Hi All,

We are first time buyers looking at applying for a mortgage, We can get between 140-150k. We have been looking at the Nationwide fixed rate over 2 years @ 5.98%, my question is, We both have around £300 each on the credit cards and I currently have a loan that has £2700 left, would it be beneficial to clean debt before applying for a mortgage?

Cheers
Lee

opinions4u

If you can afford to clear the debts and have enough money for deposit / fees / contingency fund / decorating costs / furniture for the new house etc then I'd pay them off.

My advice is once you have a mortgage never borrow for anything again - save up for it. Live you life free of unsecured loans and credit cards.

harding1985

Thanks Opinions4u, Thats the plan, once we get a mortgage this will be only our only debt! Living within our means and save if we needed to make a big purchase

Ditto

opinions4u wrote: »

If you can afford to clear the debts and have enough money for deposit / fees / contingency fund / decorating costs / furniture for the new house etc then I'd pay them off.

My advice is once you have a mortgage never borrow for anything again - save up for it. Live you life free of unsecured loans and credit cards.

Is it wrong to use a 12 months interest free credit card ie Tesco for furnishing costs, assuming you can afford to pay back within the 12 months? I'm buying a house soon and I was thinking it was better to have money in the bank, than to pay out upfront for furniture.
http://www.tescofinance.com/personal/finance/finance/creditcards/index.jsp?referrerid=Google2&atlassource=paid&cmpid=search/Google/{ifsearch:keyword}{ifcontent:content}/{keyword}/{creative}&BrandProduct

blueberrypie

Ditto wrote: »

Is it wrong to use a 12 months interest free credit card ie Tesco for furnishing costs, assuming you can afford to pay back within the 12 months?

Nope, not wrong - in fact it's a smart move *as long as you ensure you can pay back the borrowed amount in full before the credit card provider starts to charge interest on it*. Any savings you make in keeping that money in the bank for a few months more is quickly wiped out by credit card interest if you don't pay it off before the 0% interest deal ends.

Also bear in mind that anything owed on the credit card might affect your mortgage application, and that a recent change of address might affect your credit-card application.