Clearing debt before mortgage app - what to clear first!?

TravellingJake

Apologies if this thread is under the wrong subject (house buying, mortgages, debt-free?!), i wasnt sure where to put it!

Me & the other half are planning to move house next year. I've got residual debt which I want to make a concerted effort to get down before we move, but not sure what to tackle first. Any advice would be appreciated!

Balances as of today:

Loan 1 - £3610 (£304 pcm)
Credit card 1 - £2230 (min £25 but actually pay £200 pcm, £4000 limit) - 0% until Dec, then i'll transfer
Credit card 2 - £400 (£4700 limit) - used for everyday spending (groceries, petrol etc) so the repayment amount varies each month, but we get it down to (almost!) £0 every month.

I guess what i'm trying to figure out is, will the bank prefer to see:

A) high credit card balance of nearly 70% of available credit, but no loan (based on paying loan off with 0% cash transfer from card 2)

fairly even split of repayments on to loan & credit card

C) overpayments on to loan but minimum payments on to credit card

Because the interest owed is negligible (a few hundred quid), none of the scenarios will mean clearing the debt any quicker, but will it look better to have no loan and high credit card balance, low credit card balance but high monthly loan cost, or will it just not even matter!?!

Confused? Me too! Look forward to your advice.

Thanks

Thrugelmir

Banks will assess affordability. Your use of credit will be part of this check. Rather than worry what lenders might think. Focus on your own finances first. Majority of which is common sense.