Where do i prioritise? Want to buy, no deposit, & debts.

mcpitman

A couple of different options;

1 - pay off the CC's before the 0% ends, depending on when that is there may or may not be a supply of new deals available to you. I would rather make a regular low interest payment to a loan than "tread water" when a 0% card goes onto 15/20% interest.

2 - be confident you will be able to flip the 0% debt onto new cards when the current deals end and make extra payments to the loan. Last time I did this, I kept the term the same, so each time i made an extra payment the default payment to the loan was recalculated to a lower amount.
This made it easier for me psychologically to save to an extra months payment, rinse and repeat. This also lowers your ongoing financial commitments amount in case things go wrong or 0% deals run out etc.
NB shortening the term and keeping the payments the same would save more interest, but my mind doesn't always work that way.

datlex

nicwantstobuy said:

Thanks both. Are we saying pay loan off first? This is 5 more years - i'll be 44 by then with no deposit ...

I wouldn't do that.  How quickly can you afford to pay off the cards?  0% deals do not last forever.  But paying them off may look good for a mortgage.  Re being 44 with no deposit.  Been there got the TShirt.  Got the property!   
Get a settlement figure from your loan company- it does not commit you but it  does give you an idea about how much you need to get it paid off, which may be lower than continuing to make payments.   
I would pay off the cards and then put the money aside to pay off the loan.  You can ask  for the settlement figure every few months.

TheAble

Just to be clear - £56,000 in the lifetime ISA? Or £56..?

AnxiousTheElephant

TheAble said:

Just to be clear - £56,000 in the lifetime ISA? Or £56..?

Must be £56 as they havent been around long enough for £56k (4k a year max)

TheAble

AnxiousTheElephant said:

TheAble said:

Just to be clear - £56,000 in the lifetime ISA? Or £56..?

Must be £56 as they havent been around long enough for £56k (4k a year max)

Ah yes was thinking they were £20k like normal ISAs.
As others have said, paying off the debts is the way to go. Mortgage providers really don't like debts and they count against you much more than you might imagine. For example say you have £10k in cash and no debt, you will be looked on much more favourably than if you had £20k in cash and £10k of debts - even though the equity position in either case is the same. So yes, pay off all the debts first and then work on building your deposit.