First time buyer looking for advise

tarab1986

Hi, me and my partner are first time buyers and looking to buy our first home together. He has a decent deposit available (at least 25,000 - more if needed). I earn significantly more than him but our combined income is £40,000 before tax. I have a bit of debt £3000 on one credit card and just under £2000 on an overdraft. We are looking to buy in oxford (notoriously expensive) so would need a mortgage of 5x income even with our deposit. I'm working hard to reduce my debt - should I move the credit card debt to a 0% deal? What are our chances of getting a mortgage?

Thanks for any advise, it's greatfully received.

ACG

Im not sure this would be possible.

5x income
Just over 10% deposit
You have debt of more than 10% of your annual income.
Added to that, most lenders have caps in place of 4.5x your annual income.

Im not saying its impossible but realistically I think you need to sit down with a broker.

Having debt on 0% wont do make any difference other than paying less interest. Lenders will treat it the same.

tarab1986

Thanks ACG. Should I prioritise clearing the existing debt as soon as possible. Do you think it makes any difference if I clear the credit card or the overdraft first? My partner could but down a higher deposit as he probably has nearly 50k saved but we would prefer that he keeps some of his saving.

ACG

I would either speak to a broker or do some sums based on both scenarios, have a mess about onlenders affordability calculators.

Just bare in mind some lenders will say a figure that is higher than their cap - you dont want to get caught out by that.

tarab1986

Thanks ACG. We will play around with the estimates and speak to a broker. We have had a look at the sums and by cutting back and rejigging my finances and using the small amount of savings I have I could clear the debt by the end of May so may well be worth postponing house buying until then.

Pete9501

Don't switch the credit card, just make sure you are paying it down which shows you can afford and manage short term borrowing.