100% or more mortgages

meanmachine_2

Ros72 wrote:

Thanks meanmachine.

I have the 10k savings which I haven't touched for almost a year since I sold my property over seas. I haven't used it yet, either to pay off the debt, or to use as a deposit as I am, as you no doubt can see, confused as to what I should do! ;-)

As doug says, you should only hold onto these savings if your debt is at 0% on one or more cards.

What is the interest on your savings?

And what is the APR on your debts?

These days lenders will look at your existing debts and factor that into their decision on whether to lend. If you have no debts you are seen as less of a risk.

Always get rid of existing debts before taking on new albeit "good" debts in the form of a mortgage.

Ros72

Thanks for the avdvice all, seems I have some more thinking to do before I make up my mind. However, I do take on board all the advice to pay off the debt.

Unfortunately none of the debt is on 0% at the moment - one is 4.9% and two others are 9%. The interest on the savings is minimal, a meagre 2% (I didn't move it into an ISA in time).

I am loath to apply for any other 0% cards as I have moved my money around quite a bit and am now a "card tart" (such nice things they say!) and am worried about being turned down.

I see your points of view, and am now thinking perhaps it is time to use the 10K wisely, pay off the debt, and manage the rest. Bite the bullet and sort it out. The house will have to wait, and I guess I'm not in any kind of hurry. Hopefully I'll have a decent bonus in July and increase which will all help.

Thanks again for all your help.

meanmachine_2

Yes, right decision I feel, particularly in the current climate, with house prices going nowhere.

4.9% is a great rate for a loan. Who's that with?

However, 2% on savings is lousy. All you're doing is wasting your money by maintaining this "nest egg". Even if you moved your savings to an ING @ 5%, with tax to pay on savings you'd still be losing out.

I know we like the security of savings, but if someone's got debts, it's crazy holding on to them.

Joe_Bloggs

Keep enough in savings so you can find somewhere else to live without having to wait for your rental deposit returned. This is just a precaution in the case of your landlord decides not to renew your lease or you need reserves.

Find a better savings account! ING is not the worst and you get your interest monthly with internet access.

Try to pay off debts held at the highest interest rate first. If you can do this you may be able to move the remaining debt around for a lower rate. If you can pay off a credit card balance in full you may be able to negotiate a much lower lifetime balance transfer of other debts with the 'paid off' credit card company.
It is not uncommon for people in debt to have savings at a much lower interest rate than their debt. This cash is a lifeboat fund but you will be more buoyant with less debt and a small lifebelt fund.
J_B.