Paying off debts and saving at the same time??

FireWyrm

More to the point, your debt will be taken into account when it comes to the mortgage affordability calculation. If you've been naughty and missed a payment, you can pretty much kiss the good rates goodbye. In today's uncertain economy, the longer you have the debt, the easier it is to fall behind and incur black marks. Banks are looking for any and all opportunities not to lend while still appearing to do so, and thus they are cherry picking those with the very best records, and even then, there's no guarantee of a loan at the end of the day. Get rid of the debt, as fast as you can. Savings come later.

mildredalien

Psychologically it might feel better to save from now, but financially it makes better sense to pay off all your debts first. You would save exactly the same amount splitting the debt and savings over 12 months than paying off all debt in 6 months and then saving for 6 months for example - except in reality you would pay less towards your debts by focusing on those first as you would save interest.

sistafromanothermista

.....sorry posted on wrong bit

ZoeLayla

Hi all,
Thanks for your advice. I agree with getting the debts paid off sooner rather than later, although interestingly we found ourselves talking to a mortgage broker today (long story about how we got there) but we have found out as long as we get rid of the credit cards we can afford a mortgage with the deposit we are aiming for, the only hurdle then would be the credit checks. Our credit isn't too bad considering the debt we have as it is manageable and we haven't missed any payments.

mr_flibble

Don't forget the advice to save a small buffer. When I was really struggling a few years ago I was slavishly putting all my cash into debt then in the middle of winter the boiler broke fr the last time and couldn't be repaired again. I ended up paying for a new one on yet more credit.

These days I put aside a buffer then pay my debts.

So when I needed a new washing machine I had the cash spare to buy one.

Save a buffer then pay off debt and once debt free then save hard.

Kel.