Best option - pay debt or put towards mortgage?

CG2017

Hello

Looking for some thoughts on our situation if possible.

We were in a DMP with Stepchange and have recently decided to go self managed - we have 4 creditors which are about 10 years old totalling approx £27k and these have now fallen off our credit files (as they are over 6 years old) so our credits scores and reports as they stand look good.

We have raised around £12k in the hope we can make full and final settlements to our creditors (or to some)

We have an existing mortgage and would like to move home in the near future, my question is how does having existing debts (that are not on your credit file) but that you are paying monthly Impact on a mortgage application - we are currently paying around £150 to all 4 per month and all these are at 0% interest - or, could we use the money to pay off some of our existing mortgage as we are paying interest on this loan and continue to make monthly payments to our creditors?

just trying to figure out the next best move for us financially?

MovingForwards

As your debts are old, have they been sold on to debt companies? If so send out CCA letters to see if they have the paperwork to support the debts. It puts the debts on hold while they try and locate the papers, means you can save that money towards your F&FS.

Won't comment on the rest and will leave that for others

CG2017

Thank you we have started the cca request process. I guess I've just been thinking of all possible options and what is the best for us. thank you for your reply

Thrugelmir

You'll need to declare the debt owed on any mortgage application form. Yes it's an interest free loan. Trouble is it also reflects upon you as potential borrowers and your attitude to money. Not possible to have your cake and eat it.

Decision is entirely yours. As to what course of action to take. Settling the debt (in one form or another) is your best option if you wish to move house in the future.

If partial settlement is made. Likelihood of borrowing money from the same finance source in the future is let's say negilgble. As mostly likely you'll be blacklisted.

enthusiasticsaver

Regardless of whether they are older than 6 years and any defaults have dropped off your file you have to declare them on a mortgage application as an outgoing and they will be taken into account for affordability checks. I am not sure whether increasing a mortgage if that is what you are doing at the same time as paying old defaulted debts is advisable. If you can afford a higher mortgage can't you increase the DMP to get them settled sooner before moving?

I would try and get them settled either by repaying them or doing F and Fs. Obviously though that will mean as Thrugelmir says that will mean you can't borrow from them in the future.