what should i do?

NealeH1875

Hi guys,

i don't have a lot on finance or credit, not that i think anyway.

I am looking to buy early next year and i am thinking do i pay off the small amount of credit i do have.

Car insurance, my football season ticket and my car serving plan. is it worth me paying all these off asap or just leaving them run to make sure i dont miss any payments? it works out to £120.00 pcm roughly.

also i have 1600 on a credit card but i dont feel a need to pay that off in full yet, is it worth just paying that 1/200 a month?

cheers,
Neale

ACG

There is not really any information for us to go off.
Assuming affordability is not a problem it should not matter.
If affordability is an issue then it would be better to pay it off.

But with no figures to work off it is difficult to say. Have a mess around on some affordability calculators.

NealeH1875

Affordability is no issue,

i am saving £1200 a month minimum, £800.00 goes on rent/care/expenses etc then i leave myself 1k left. I just didnt know if it was better to clear credit asap or just keep with the payments

AnotherJoe

NealeH1875 wrote: »

Affordability is no issue,

i am saving £1200 a month minimum, £800.00 goes on rent/care/expenses etc then i leave myself 1k left. I just didnt know if it was better to clear credit asap or just keep with the payments

Is the credit card zero percent? Otherwise you are fooling yourself if you are paying say 30% interest ona credit card whilst effectively "saving" the cc payment into a bank account. You are still fooling yourself even if it is zero percent but at least not paying stupid interest.
If you have £1,200 in the bank and owe £1,200 on an credit card you don't really have any savings all you've done is borrow money on a credit card and put it in your bank account.

kwame41

If your planning to apply for a mortgage I would wipe all the debt clean.

You have enough disposable income to do this quickly if you choose to.

Your making yourself look as attractive as possible and showing your a responsible borrower. Mortgage (secured) lenders apply different rules than unsecured lenders.

You mentioned you pay rent at the moment. Is your landlord part of the new scheme that logs payment information with credit reference agencies? That will show you pay your rent on time.

All these little things you can do to make applying for a mortgage as straightforward / easy as possible.

NealeH1875

Hi, Credit card is 0% yes, it was a balance transfer one so i need to check when thats up.

I have about 7k in the bank currently and this is increasing by 1200 pcm.

rent is to parents.

so worth taking money out of my savings, clear cc and direct debits?

kwame41

If you werent about to apply for a mortgage then there is no point paying off a zero % card until the term ends. Because you will be earining more interest on your savings.


That said, and for my previous reasons I would make sure the balance is paid and is showing as such on your credit file (s) before you apply for the mortgage.

AnotherJoe

I agree with kwame, pay off the zero% card, you are only putting off the day until it needs be repaid, and in the context of a mortgage its better to not have something there showing you are making only minimum payments on a CC even if financially its a better deal.

I would leave the insurance, football season ticket and car service plan as is.

NealeH1875

thanks all, so instead of saving this month, or not saving as much is it worth paying more of the card off instead of the £200 i usually do?

AnotherJoe

The longer you leave it the more interest you get , but that is minor, lets say you are stoozing at 3%, on £200 =50p for the month), and since you do want this loan to drop off any records when they look back which can take time, and if you are buying in the new year i dont think its worth the small chance of getting a worse mortgage offer.
So yes pay it off and be done.