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Cash Deposit/Equity/Debt

hufc2002
hufc2002 Posts: 329 Forumite
Part of the Furniture 100 Posts Name Dropper Combo Breaker
in Mortgages & endowments
Hi all


What is the best to have when looking to move home in terms of a deposit/debt?


Is it best to have cash saved up rather than have equity in the house? The reason I ask is that I am currently overpaying my current mortgage but wondered if I would better off saving it. Current mortgage rate is 2.49% and I am overpaying £220 per month. I could potentially put this in Club Lloyds Monthly Saver at 4%.


Looking to have a £20k deposit for a £200k property. Currently have £11k in savings and between £10-15k in house (depending upon valuation).


Credit Card debt is approx. £5k.


Thanks

Comments

  • ACG
    ACG Posts: 24,884 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    From a lenders perspective I think there is very little difference in whether it comes from equity or savings.

    If you will earn a few extra quid in savings, dump it in a savings account. However, it sounds like you already have your deposit so how long will it be in the savings account for? is it worth the hassle if its just going to be a month?
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • chelseablue
    chelseablue Posts: 3,303 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    I don't think it matters, as long as the money is somewhere :)
  • hufc2002
    hufc2002 Posts: 329 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    I suppose my next job is to have my house valued and then to calculate moving and buying fees.
  • ThePants999
    ThePants999 Posts: 1,748 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper
    If it's equity, it's even easier to answer the solicitor's questions about where the deposit on the new home is coming from.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Why not pay down your credit card debt?
  • hufc2002
    hufc2002 Posts: 329 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    Thrugelmir wrote: »
    Why not pay down your credit card debt?


    Would this be preferential rather than having a bigger deposit?
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    hufc2002 wrote: »
    Would this be preferential rather than having a bigger deposit?

    What's the repayment plan? It's not going to magically disappear of it's own accord.
  • hufc2002
    hufc2002 Posts: 329 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    Thrugelmir wrote: »
    What's the repayment plan? It's not going to magically disappear of it's own accord.


    These credit card balances are on 0% and will be cleared by August 2018.
  • amnblog
    amnblog Posts: 12,782 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Credit card debt is among the most harshly factored debt in terms of affordability on mortgages. (zero rates offers or not)
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • hufc2002
    hufc2002 Posts: 329 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    amnblog wrote: »
    Credit card debt is among the most harshly factored debt in terms of affordability on mortgages. (zero rates offers or not)


    So basically what you are suggesting is that I use 50% of my current savings to pay off Credit Card debt? I will therefore be £5k short for my 10% deposit.
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