Got a large credit card bal - use deposit to pay off?

random333

So we have a combined total credit card balance of £7000 for the both of us.

We pay off the credit cards each month - more than (minimum payment + interest amount) so that we actually pay off a part of the credit balance each month.

Is it more advantageous to pay off the whole £7000 balance with the money we have saved for our deposit - or keep the money for the deposit?

We are going to banks next month to apply for a mortgage in principle - but it is difficult to know yet what they will offer us as I am self-employed. Thankfully my partner is full employed.

[Deleted User]

My advice re"mortgage would be to use a "whole of market broker" they have access to more deals than any bank.

glosoli

It will depend on the affordability,

It's possible that you may be able to get the mortgage even with the £7,000 outstanding, whereas depending on some figures you may have to pay some/all of it off. The adviser you speak to in the bank can give you a proper answer after they take you through income/expenditure checks.

Thrugelmir

random333 wrote: »

Is it more advantageous to pay off the whole £7000 balance with the money we have saved for our deposit - or keep the money for the deposit?

Pay the debt off. Why incur interest unnecessarily.

Have you both opened Help to Buy ISA's?

The_Real_Cheddar_Bob

Agree with the above. Pay the debt off and start from that point. If however your only chance of getting a mortgage now is to get the mortgage first then its worth a shot.

I'm not sure what mortgage declines will do to the credit file in terms of other mortgage applications thought

Filo25

Depends on your overall financial position, in terms of how constrained you are by affordability v deposit, potential impact on LTV bands, interest rates on your credit cards and many other things.

We had the same decision when we were buying last year and it ended up making more sense to leave the debt in place and keep the money for the deposit.