Mortgage advice for those with Debt

tugalis

Hi,

I wondered if someone could give me some quick advice :rotfl:.

Me and my partner currently live with a parent, the house is up for sale and when it is sold we will be gifted around £18000.

I have approx £14000 in debt. Our joint income is 40k, we have around £600 spare a month as we pay extra on the parents debts to keep the wolves from the door, hence the gift back. When we leave and get a house we will have approx £2100 spare for mortgage and utilities.

£3250 is loan (taken for home improvements) which we plan to be paid out of the gift and the rest is credit card debt on 0% interest cards for the next 20 months.

We will soon be applying for a mortgage however it occurred it to me that maybe I should be paying less every month on the cards and using the money to increase the deposit for the house. This month for example we have around £1500 in total to put somewhere due to a tax rebate.

We are using approx 35% of our credit and never miss a payment, both have good credit scores.

I understand asking for an answer may be like looking for a needle in a hay stack, however all the things I can find that are half relevant to our situation are people that use a high proportion of their credit or have bad credit history, so I am unsure if that applies to us.

Any ideas would be greatly appreciated before I go asking an advisor and getting a search on my file.

Thank you in advance!

T

P.S. Mods if you think I have put up too much personal info or in the wrong place please let me know and I will remove it.

andyfromotley

Hi,
well two thongs are clearly true.

1. You will need to have saved a deposit and fees to buy a house. The higher your deposit, the cheaper your mortgage will be.

2. Any outstanding debt will be reflected in how much banks will lend to you.

so its swings and roundabouts to a degree. You probably need to do both. Given that the debt it relatively small and you have disposable cash you postpone the purchase for a year, pay off your debt and have a chunky deposit?