Mortgage now and loan for wedding vs spending all savings

stuart.pinfold · 26 April 2011 at 3:46PM

Hello,

Unsure where to put this for the best response as it covers multiple forum areas, so I have posted in multiple forums - please feel free to move/delete as appropriate.

We are getting married in July and have around £10,000 in ISA and saving accounts which will cover this and the honeymoon.

However what we really want is a house and a mortgage, especially at the moment before the housing market starts to expand again and house prices start to go up.

Would we be better taking out a loan to cover the cost of the wedding and using the savings towards a deposit, or wiping out all of our savings on the wedding and starting to save again afterwards?

We are aware that you are unable to use a loan as a deposit for a mortgage, hence the question.

As background, we have not been accepted in principle for either a mortgage or a loan, but we both have very good credit ratings. However as I work as a freelancer this may go against me, although I can provide the last three years or more pay slips, which prove that - while there are fluctuations in the amount I am paid weekly - the amounts are regular and fairly high. My other half is in a full-time job and gets paid monthly and can also provide the last two years' pay slips if necessary.

So, in our situation, would you get the loan and keep the savings to use as a deposit for mortgage hopefully in the next six months, or spend the savings, have no debts, but also put on hold plans for any kind of house ownership for at least another two years while the prices go up and up?

Any advice appreciated!

Stuart and Sarah

beecher2 · 26 April 2011 at 3:50PM

any potential lender would take the loan into account and it makes no sense paying off a loan while you have savings. Spend the savings (and try to cut back where you can) and then build up your deposit. I can't see prices going 'up and up' in the next two years with the cuts only just beginning.