Personal loan and mortgage application

gemmacantan1

Good Afternoon

My husband and I have been discussing our finances this week as we are hoping to move house in the next 12 months. We are looking at our debt and we currently have £6500 outstanding, this is made up of credit cards and a £3k loan. We currently pay £450 a month approx for all of the debt which is quite high and we could do with lowering the amount, we have discussed the option of borrowing the full amount and paying it all off and cutting up all the credit cards, this would lowered our monthly amount to £200 which to us is a big saving.

The only thing that worries me is that it will affect the mortgage we can borrow and we kind of need a 90% mortgage so we can move on.

Is there another way around getting our debts in order. Obviously if we leave it the same that will affect our mortgage more. Lloydstsb would drop our offer by nearly £20k but natwest it didn't change much although they did say it would depend on our financial circumstances.

I just wondered if anyone had any advice? We don't have any savings so we can't offset that against our debts. I'm not sure what the best way to move forward is. If we didn't need to move the loan would be the perfect option but unfortunately we have to move next year and need to consider all other options.

Please help

Gemma

Thrugelmir

If you don't have any savings how are you going to fund the move?

Suggest you visit the Debt Free Wannabe board for support and advice on how to get your finances back into order.

gemmacantan1

I forgot to mention the savings from the move will come from equity in our house and from my husbands parents, they've been investing it for years, however its for houses only not paying off debts.

poppy10_2

gemmacantan1 wrote: »

I forgot to mention the savings from the move will come from equity in our house and from my husbands parents, they've been investing it for years, however its for houses only not paying off debts.

Wrong way round. You'll need to pay off your debts first before thinking you about funding a deposit.

gemmacantan1

poppy10 wrote: »

Wrong way round. You'll need to pay off your debts first before thinking you about funding a deposit.

I am paying them off. That is my task for the next year. We don't have access to the savings, its in a long term fixed account that is in my father in laws name. We have asked him before and he paid off half our debts but he won't give us anymore towards what we have outstanding.

It doesn't matter, I think you've already answered my question.

DannyboyMidlands

What's the point in paying interest on debts if there are savings there that could be used to pay them off?

If the parents are gonna give the money, why does it matter if it's labelled debt or deposit? They are both means to the same end.

gemmacantan1

Not according to my father in law. He just thinks we should keep paying the debts off. He thinks if he gives us the money for the debts it will be eaten up and there will be nothing left to fund the move.

To be honest with how the economy is, I doubt we'd be able to move anyway.