Advice and options on debt/ FTB

Moneylockdown

So just pondering on the different options I could have for when we are finally wanting to buy a house at the back end of 2016 (would love it to be end of 2015 but we know that isn't financially possible) so any help will be greatly appreciated.

Little background.
My salary - £16k
OH - £17,474

OH has a default in November 2011 and late payments which were finally paid off in December 2014 - it's a very long story regarding my MIL :mad:

Our CC debt will be paid off in october 2015 at which point we will have £6325.60 left on a loan at £204.05 a month.

From October we would have £4-500 spare should we:

1. throw this at our loan which would have it paid off by October 2016 but only leave us with a 5% approx. deposit (will this even be possible with PH past??)

2. should we save the 'spare' and have a 10-15% deposit but have (at the point of applying) £4285 left on the loan?

I know ultimately it is our choice but some advice or people who have been here before words of wisdom - am I just wishing for a house that will never happen? Our heads are in the debt busting frame of mind so wanting to plan as much as possible.

Thank you for even getting to this point I know it's a ramble :T

Beckyy

The loan will affect affordability checks and impact on the amount you will be able to borrow. Personally I would pay it off as soon as you can then do your best to save up a deposit, you'll have a better idea closer to the time of house prices and what is realistic deposit-wise.

Wishing you the best of luck

ACG

It will come down to doing the sums.
Either will be achievable on the face of it, but your more likely to get it through at normal rates with a 15% deposit than you are with a 5% deposit.

If this goes through at 5% deposit, its likely to be at a rate of circa 6%.
If it goes through with a 15% deposit its likely to be closer to 4.5-5%.

Moneylockdown

Thank you both for your responses.

We have sat down and decided to pay that loan off because you never know what might happen with jobs etc these days.

Thank you again xx