Loan or Mortgage

JERRUM84

Hi, my partner was in deep finical trouble a couple of years ago and I took out a loan to cover the debt. We've since parted company and I'm stuck with a Barclays loan currently standing at approx £15,500. When I first took out the loan,it was spread over 5yrs and I was paying £410 each month in repayments. In a bid to ease my monthly outgoings after the split I went to see the bank and got my repayments reduced to £285 each month, with the life of the loan becoming 10yrs. The interest means I'm paying double the loan amount back. My parents have persuaded me to stay with them until I get myself financially straightened out so my dilemma is- should I save up to pay off my loan (ideally in 2yrs) or save up a deposit to buy a house? Is there a way to have a mortgage absorb my loan? Any advice would be well recieved!

hur575

I was once hooked into the craze of buying your house even if you can’t afford it as it will increase in value. I think a lot of people are finding otherwise, a colleague got 125% mortgage from northern rock before the economic crisis, and he is in negative equity, his mortgage is so high he can’t save anything or pay more to it.

My advice if you have the offer to live with your parents, take it and pay debts first and save substantial amount to live in comfortable mortgage rate. Do not rush getting a mortgage.