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Pay off loan, pay off family loan or put towards deposit?

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onthemend88
onthemend88 Posts: 258 Forumite
Fourth Anniversary 100 Posts Name Dropper
in Mortgages & endowments
Good morning

I have about £5000 left to pay on my unsecured loan and about the same amount that I owe to my Dad.

He has offered to either pay off my unsecured loan, wipe off the debt I have with him or put towards my deposit.

I am assuming it is better to pay my unsecured loan off as it shows better affordability?
First Time Buyer
AIP 18/02/2020 - Full Application 25/02/2020 - Valuation - 16/03/2020
17/03/2020 - Mortgage Offer Issued
23/03/2020 - LOCKDOWN
19/06/2020 - Exchange of Contracts
07/08/2020 - Officially Homeowners

Comments

  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
    10,000 Posts Fifth Anniversary Name Dropper Photogenic
    I would clear the unsecured debt because the debt to your dad can i presume be settled later at your convenience and also wont show on any searches they do.
    It also will save interest.
    Only reason not to do it might be if the extra £5k as deposit tipped you into a better LTV with a lower mortgage rate.
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