5% deposit now or 10% later?

Fireflyaway

We have a 5% ish deposit but are considering renting an extra 2 years in order to double it.
I have defaults that will be gone after 2 years. I will have paid back the overdrafts too.
I'm guessing getting a mortgage might be easier with 10% and the 2 years will get the debt cleared hopefully improving credit score.
So go for it now or wait ?

anto164

If i were you, i would wait.

It'll be a lot cheaper on the mortgage with the defaults gone, and with a higher deposit.

Thrugelmir

Fireflyaway wrote: »

I'm guessing getting a mortgage might be easier with 10% and the 2 years will get the debt cleared hopefully improving credit score.

The debt is going to impact affordability too. Multiple overdrafts aren't a good way to start home ownership. Why not use your savings to clear your debt immediately. Then build upwards from there.

CommitedToChange

I'd go talk to a broker and then look at the difference in renting vs buying at the rates you might get. I've just gotten a decent rate with a 5 year old unpaid default (but 15% deposit).

You can't really decide without more information.

Fireflyaway

Having looked about, I think mortgage payments would be around £600 a month more than our current rental so we could potentially save or over pay £14,400 over a 2 year period if we moved now. Staying put would enable us to save £24,000 over a 2 year period to add to our deposit.

Wassa123

If the interest on your mortgage is less than the rent and you can also afford the capital repayments on top then go for the mortgage.

Yes every 5% increase in deposit gets you a lower interest rate but you could get a 2 year mortgage and add the deposit either in overpayments or when you remortgage.

You never know what will happen with house prices but the historical trend has ways been up.