Shared ownership - pay off debt or save for mortgage

x.chick.x

I'm in a bit of a dilemma. I don't know what to do for the best. I have nearly maxed my credit card (have addressed the issues so no using it anymore), I have £3,500 left to pay off (unsure of interest rate, not sure whether to balance transfer) and have £1,200 in savings for a deposit. I have around £800 spare a month to either continue saving for the deposit or to pay down the debt quicker. I am really keen to get a shared ownership home which have only just started to be built so I have little time to sort out my finances. I'm a single parent if that has any influence.

Just looking for a bit of advice on where to start and what would be best for trying to get a mortgage when the time comes with my credit rating etc. Or if I'm mad for even thinking a shared ownership mortgage could be an option!

BettyVob

Hi, non-expert here, but just in the process of buying SO. I have £1800 on my credit card and have been told it isn't an issue (though not got my mortgage through yet). How close are you to your maximum balance? Everything is looked at in terms of affordability. If you have no missed payments and they can see regular payment of the card that will be in your favour. £800 is a really good sum per month to have spare. If it were me I'd put maybe £200 on the credit card each month and save the rest. At £200 per month and no spending your card will be paid off within 18 months and you'll still be building a healthy deposit. There doesn't seem to be a need for the card debt to be gone before you apply.

x.chick.x

Brilliant, thank you for the reply, it gives me hope! No missed payments or anything sinister on my credit report but nearly maxxed the credit card so affordability isn't great but hoping to bring that down considerably in the next few months and concentrate on the deposit after that.

Fingers crossed for you and the SO, let me know how it goes, don't see a whole lot on here about SO apart from people putting it down.

BjB

I'm in a situation very similar. £3400 on CC, I was hoping to use savings to purchase a SO property that's being built and pay off credit card later as the balance is always on 0% cards. The thing is, while the Homes England SO Calculator tells me the home is affordable with the CC balance, it looks like the balance massively affects the amount mortgage lenders will lend me, so I'm going to have to pay it off. That was using Nationwide's affordability calculator, as afaik it's the only one that lets you choose shared ownership.