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Should I get a loan now or wait? - Our house is on the market

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Should I get a loan now or wait? - Our house is on the market

edited 14 March at 4:12PM in Loans
7 replies 234 views
ghost5ghost5 Forumite
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MoneySaving Newbie
edited 14 March at 4:12PM in Loans
I currently have debts of £14,500 across 3 different lenders / credit cards.  The repayments are manageable but not ideal and I have been working hard to bring everything in line.  Apart from wishing to win the lottery and paying it all of I am happy with the way things are at the moment with my debts.

We have put our house on the market and the money raised from this will be used as a deposit for a new house.  We have been accepted in principle for a mortgage that is far more than we will need, so everything is good there.  I do not know if our house will sell quickly.  It has had 1 viewing in 6 weeks so it could go tomorrow or we could still be in this house in 6 months time.  Both of our credit scores are excellent, despite my debts.

With the recent interest rate drop I have been looking at loans.  I could get a loan right now which will save me £80 / month and also pay off the debts 4 months earlier.  Should I continue looking into this or with us wanting to take out a new mortgage should I hold fire, wait until we have moved house and then start looking again.  The worst thing that I can do is affect my credit rating negativity now, our house selling tomorrow and we then can't get the mortgage that we want but with the low interest rates at the moment it seems like a good time to look into something like this.

Many thanks,


Edit:  I suppose the question that I am asking is:  If I take out 1 loan now and pay off 3 other debtors is there a possibility that this can affect my credit rating / chances of getting a mortgage in the near future?
Thanks,

Replies

  • edited 14 March at 4:13PM
    zx81zx81 Forumite
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    edited 14 March at 4:13PM
    Never take out credit when you're hoping to get a mortgage.

    Also, you probably won't be able to get a loan at any sort of decent rate with that level of debt.  Your high credit scores are of no use to you when applying for credit.

    Go to the DFW boards and get advice on cutting costs and repaying faster.
  • ghost5ghost5 Forumite
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    MoneySaving Newbie
    zx81 said:
    Never take out credit when you're hoping to get a mortgage.

    Thank you.  Your first line is what I thought and I will now hold off until we have our new house.
  • jeepjunkiejeepjunkie Forumite
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    Yes, lol, excellent credit score simply means you are a great we earner for financial institutions. 
  • enthusiasticsaverenthusiasticsaver Forumite, Board Guide
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    I would not apply for new credit if you are going to need a mortgage within the next 6 months.  Just concentrate on paying down the debt as much as possible before applying. 
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to [email protected]
  • Crumble2018Crumble2018 Forumite
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    zx81 said:

    Also, you probably won't be able to get a loan at any sort of decent rate with that level of debt.  Your high credit scores are of no use to you when applying for credit.


    That's rubbish - we have a £20,000 loan at a rate of less than 3%.


  • foxy-stoatfoxy-stoat Forumite
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    zx81 said:

    Also, you probably won't be able to get a loan at any sort of decent rate with that level of debt.  Your high credit scores are of no use to you when applying for credit.


    That's rubbish - we have a £20,000 loan at a rate of less than 3%.


    Thats great, nothing to do with the OP's situation though is it.  They are £14,500 in the red at the moment so if they want a loan to cover all that then their income needs to be high enough to service £29,000 of debt to pass the lenders affordability.

    You may have a £20,000 loan of less than 3% but did you have £20,000 of debt when you applied?
  • Crumble2018Crumble2018 Forumite
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    zx81 said:

    Also, you probably won't be able to get a loan at any sort of decent rate with that level of debt.  Your high credit scores are of no use to you when applying for credit.


    That's rubbish - we have a £20,000 loan at a rate of less than 3%.


    Thats great, nothing to do with the OP's situation though is it.  They are £14,500 in the red at the moment so if they want a loan to cover all that then their income needs to be high enough to service £29,000 of debt to pass the lenders affordability.

    You may have a £20,000 loan of less than 3% but did you have £20,000 of debt when you applied?

    I was merely replying to the comment saying they wouldn't get a good loan rate because of the amount of debt. I wasn't saying that the OP should apply for a loan now.
    And Yes - we had around £40,000 of debt in loans and car finance when we got our mortgage - obviously we didn't get offered as much though.
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