Mortgage help.... how to manage current debts?

wanting_an_easy_life

OK, so figures and facts first.

Currently, it looks like this:
Me: Unsecured loan, outstanding £6500
OH: career development loan/unsecured loan. Total outstanding: £12000
Credit cards: £12500

Total unsecured debt: £31000

Savings: £6000
Potential deposit (gifted): £25000

Total to put down: £31000

and before someone says "Pay it all off and start saving again", the gift is based on the fact that we need a house.

Realistically, we would need a house of ~£190k.
Joint income ~£60k

So.....

Looking at it, the unsecured loans don't seem to scare banks. They are a known payment. I think it's the credit cards that are causing us trouble.

I'm guessing, the best thing to do would be to pay off the credit cards, save as much as possible?

we're FTBs (although both over 40). How strict is the lending criteria on a 95% government backed scheme? Would they allow unsecured loans of £18500?

I'm happy btw if any professionals want to PM me.

Jonbvn

You should pay off the credit cars ASAP, since the interest rates are usually very high.

I think you are likely to struggle to find a lender ATM, given your current level of debt.

wanting_an_easy_life

Easier said than done, of course. To be fair, they are split between 0% for 2 years and 5% for life so hardly high interest.

I think I'm going to play it like this;

Pay £6k straight off the credit cards. Spend 8 months paying ~£500 a month off. I'm aware this will still leave ~£2k so I'll have to use some of the gifted deposit to pay the rest.

Does anyone see the unsecured loans being a problem? They'll be down to ~£5k and £10k respectively by then.

Dave_Ham

Please do not do anything until you have gone through your exact situation with a qualified professional.

There may well be a few ways to attack this, although paying down cards is better for long term costs; it may not make the mortgage more/less achievable.

Subject to lender selection and specific details, you should have a solution now on this.

Assume payment history on unsecured has been good or you would have mentioned??

Thrugelmir

While you might "need" a house. Lenders will be somewhat reluctant to advance money. Given the state of your finances despite a good joint annual income.

Suggest you make some personal sacrifices to address the level of debt that you currently have.

amnblog

Dave Ham is right.

Get some advice.

For example - If you use the gift to pay off the unsecured debt you could use the H2B scheme 20% equity loan to supplement a 5% deposit on a new build.

But there are a number of implications you need to consider for this, or any other option.