Credit card debt and Personal Loan

rommy

Hello,

I am planning to get a mortgage early next year and I need advise how to manage my existing debt based on the experienced users on this forum.

I have got 42k limit on my credit cards and I am utilizing 20k on them. All of the debt is on 0% balance transfer offers valid till July next year. I have also got a personal loan of 9.5k with 6.5 years left to settle the loan(monthly installment 150 per month).

Now I have got enough money to start settling this debt and I want to prioritise payments based on the impact it will have on my future mortgage application. Should I settle my credit card balances first or should I pay off my personal loan? I am not incuring any interest on the credit cards balances so I thought it might be wiser to pay loan first to reduce interest. But on the other hand personal loan is a long term commitment of 150 per month so it would not have significant impact on overall money lend to me for mortgage application.

I want to go for help to buy London deal with 5% deposit upfront and if do not settle all of my debt than I can arrange up to 10% deposit. Will having a higher deposit help with lower interest rate on help to buy deals?

I would really appreciate your feedback. First time buyer here and it all seems very daunting.Thank you

-taff

A higher deposit will get you better mortgage deals.
But your mortgage will be conditional on your affordability. So you need to be able to afford your debts including the potential mortgage to get one in the first place.
20k on CC's is not going to look good on your application unless you're on a very good wage.

csgohan4

29.5k in debt, how much do you earn? You need to settle your debts first as they impact on how much you borrow.


Debt free wannabee forums is a good place to get advice