Save or pay off anything outstanding?

Richie23_2

Hi

In a bit of confusion what to do here..
We are getting married next year and have arranged most stuff already..honeymoon, photographer etc but i dont know whether to pay off things like honeymoon every month in lump sums or just put it in a savings account and earn a bit of interest. would there be much interest in 8-9months of it.

We are also looking to buy another house so will it look better we have savings (even though its for the wedding) or less debt. Would the honeymoon class as a debt?? so when they done a credit seach would it show £3k as outstanding? All out debt is interest free.. i personally would like to pay it all off in advance so we dont spend it but then think would it be worth while saving it and paying it closer to the date!

What do you think? sorry if this is in the wrong thread.

Cheers

Richie

tyllwyd

Well, as a rough calculation, if you saved £3,000 in a savings account at 6% for a complete year, that would give you £180 gross interest. You are only talking about saving it for about 9 months, so three-quarters of that is £135. And if you save it in an ordinary savings account, assuming that you are a basic rate tax payer, you will pay 20% tax, ie £27, so that leaves approximately £108.

bkclive

Apart from that reply that makes me wonder if I've slipped into a parrallel universe, I would go along the lines of if it's in your bank and earning money for you, that's the best place for it, especially if your debt is interest-free.
As far as I understand credit searches, it's the repayments being up-to-date and on time that counts, and then if you have too many committments. With selling a house and buying another you will have the advantage of showing that mortgage payments were kept up to date as well.
Perhaps one more reason to keep the money in an account is that it means you can have an emergency fund available, which could be vital, knowing how some things can go wrong when you least expect it!
Congratulations and have a great day!!

Richie23_2

All kind of makes sense.. but wouldnt the more you have outstanding go against what you can borrow?? We already have a house but are looking to get anothr one and rent ours out. So i'm thnking the more we got on other things like £3k honeymoon,£500 table & Chairs,£300 settee will go against our max borrowing..even though its all interest free..

RAS

Hi

Suggest that you get the wedding out of the way and then see what the housing market looks like. And reduce the amount of debt you have in the mean-time if you can do that and pay for the wedding.

Also I would suggest that you think carefully about buying loads of new stuff even on 0% finance as all that means is that the price has been inflated. See if you can get stuff as wedding presents instead.

You really do not need it and if one of you stops working before they are paid off, you are snookered. Save up and buy new stuff as you can afford it instead.

Richie23_2

RAS wrote: »

Hi

Suggest that you get the wedding out of the way and then see what the housing market looks like. And reduce the amount of debt you have in the mean-time if you can do that and pay for the wedding.

Also I would suggest that you think carefully about buying loads of new stuff even on 0% finance as all that means is that the price has been inflated. See if you can get stuff as wedding presents instead.

You really do not need it and if one of you stops working before they are paid off, you are snookered. Save up and buy new stuff as you can afford it instead.

Hi,

No we havent bought anything since we moved into the house 2 years ago..had it 3 years on interest free..we only got 1 year to pay on the settee and chairs. But i;m thinking is it best to pay them off straight away before we get a credit check for our re-mortgage (2 year deal up) or put the money into savings!

Cheers

RAS

Check out and early payment penalties before you do anything.