Keep for deposit or pay off debt?

Lottie2050

My husband and I are going to be given some money to help get a house. The question is do we use the money to pay off debt meaning my husband can get a co-ownership mortgage on his own. Or do we hold the money to use as deposit because once I have 12 months without missing a payment I can get a mortgage with him and get a bigger mortgage?
Have I made sense?

dimbo61

No replies so far !
It sounds complicated and I am guessing we don't know the full picture.
Your debts, incomes, credit scores , Loan to Value and deposit are all factors.
Maybe one for the brokers

csgohan4

depends on the reason for the money, if it was given for x then should be used for x. Otherwise will depend on your own personal circumstances

Sparx

What's your own credit history like? Your OP implies you've missed payments, possibly have defaults and a not-so-great credit history?

Lilla_D

Just to address the first question: repay debt or put down bigger deposit? Normally if you repay a certain amount debt, your potential borrowing will increase by more than this amount. E.g. you repay £10k debt, your max mortgage borrowing could increase by more than £10k.

However, this is subject to T&Cs and as said above, there's way too little information above.

You mention that you have had late/missed payments. Dependent on how bad the credit history is, you may need more than just 5-10% deposit, as lenders may regard you as high risk and limit the loan to value.

You mention shared ownership. Not every lender does it, so if bad credit history has to be taken into account as well, then your lender options will be limited.

The usual advice seems to be the best one here as well: please speak to a broker, let them review your income and credit history details and he/she will be able to advise you about your options.

foxy-stoat

You should clear your debts and save the normal monthly repayment amount - get a mortgage when your financial position improves.

Lottie2050

Thanks for the replies... My husbands credit score is impeccable. Mine is rubbish and I have defaulted on a couple of debts. I have started making monthly payments and approached creditors myself. We saw a mortgage broker not too long ago and my husband has 1 obligation that means he won't get a mortgage until it is paid which will be January. We were told once I have 12 months of payments then I could be given a mortgage too as I have no ccjs etc... I think someone has already given me the answer I need. Even if I can pay of my defaults it is still there to see and will still go against me.
Currently homeless (rented previously) and was wanting a quicker fix to our problems but don't think it's gonna work that way