What should i pay off first before mortgage application?

symey

Hi all

My wife and I are looking for a new property, i don't have too much debt outstanding for what i earn but I'm not sure from a lenders point of view what would look better as an ousting debt (if you know what i mean). Ive had a mortgage agreed in principal but just want todo what i can before we find a new home (not proving very easy at present - just can't find the right place for us).

I have a £14000 approx outstanding personal loan from Tesco Finance which is £285 per month and ends in just over 5 years (was a six year term). Tesco allow you to make lump sum payments, with the option of reducing the term or the monthly payments.

I also have a Sainsburys Credit card, that has a £4000 balance with an £11000 credit limit, it is 0% until August 2015 so is not increasing each month.

From this month i will have approximately £1500 a month to throw at these remaining debts whilst at the same time continuing to look at properties.

I wondered if you had a view on what should be cleared first? Is there one or the other that a lender would prefer not to see?

Any feedback appreciated.

Thanks
Simon

breakingbad

I believe they generally look slightly less favourably on credit cards, but I could be wrong! Also, they could be worried that you have £7k of instantly-available credit too

symey

thanks, they could do i suppose - from what i understand a high credit limit can indicate a good relationship with that lender. Difficult one to answer i guess.

In relation to my current salary, i dont think the available credit would make much difference, im just not sure what would be better paid off first in the eyes of a lender.

thanks