Pay off debt or add to deposit?

Camilan

My husband and I are looking to buy a house soon. We currently live in rented accommodation. Hubby has 2 houses.. both which are buy to let (bought before he met me) one we have just accepted an offer on and the other he has £60k left on the mortgage. The house sale is our deposit for our new home.
My husbands credit rating is extremely good and mine is not! Long story about our finances being completely separate for a
few years…this has now changed.
I have reduced my debt massively over the past few years but still have approx £10k (student loan, credit cards x2, overdraft and a bank loan)
I worry that my credit history will affect our mortgage application massively. 

What I’d like to ask (along with any other advice) is..
Would we be better off paying off my debt with the proceeds of the house OR use all the proceeds to put up as a deposit? 
Which option would be the best for us? 
Any advice would be gratefully received

MovingForwards

1) Do you have defaults, late / missed payments, CCJs etc?
Or

2) Is it you just have finance which is paid on the each month, minimum payments, or slightly above, being paid?

No 1 would be a potential problem, depending on ages and amounts of each.

No 2 depends on income, how much you're borrowing and lender affordability calculations. 

grumiofoundation

As above will all depend on how much you are looking to borrow/have as a deposit and how close to the wire you are. And what ‘form’ the debt takes will mean it impacts differently on affordability. Student loan for example will just count as an outgoing, the amount owing is irrelevant. 

Have you spoken to a broker and/or looked at online affordability calculators?

What interest rates are you paying on the various debts? 

Assuming you would still have the required deposit (including the +3% SDLT assuming ENG) would make sense to pay off any high interest debt.* As each month you are losing money versus any interest received on deposit. 

*really debt higher interest than mortgage interest will be, even if take out higher mortgage will be cheaper to pay this versus higher interest debt. 

K_S

Camilan said:

My husband and I are looking to buy a house soon. We currently live in rented accommodation. Hubby has 2 houses.. both which are buy to let (bought before he met me) one we have just accepted an offer on and the other he has £60k left on the mortgage. The house sale is our deposit for our new home.
My husbands credit rating is extremely good and mine is not! Long story about our finances being completely separate for a
few years…this has now changed.
I have reduced my debt massively over the past few years but still have approx £10k (student loan, credit cards x2, overdraft and a bank loan)
I worry that my credit history will affect our mortgage application massively. 

What I’d like to ask (along with any other advice) is..
Would we be better off paying off my debt with the proceeds of the house OR use all the proceeds to put up as a deposit? 
Which option would be the best for us? 
Any advice would be gratefully received

@camilan The answers to your questions depend on the specific details of your adverse credit history and the borrowing numbers such as LTV, deposit size, how much you need to borrow etc.

Camilan

I do have a ccj from 2 years ago. 

I will look into interest rates on my debts. 

I have only paid everything on time for a year now. I was terrible with my finances but so much better now but I know that won’t be taken into consideration. 

The deposit will be around £180k looking to borrow £210k ish. 

As you can tell I’m a complete novice with all this and really appreciate the advice x

K_S

Camilan said:

I do have a ccj from 2 years ago. 

I will look into interest rates on my debts. 

I have only paid everything on time for a year now. I was terrible with my finances but so much better now but I know that won’t be taken into consideration. 

The deposit will be around £180k looking to borrow £210k ish. 

As you can tell I’m a complete novice with all this and really appreciate the advice x

@camilan If your adverse history is a satisfied CCJ registered 2 years ago with a clean 12-month history, you should have plenty of options at such a low LTV.

If affordability (as per lender calculations) to borrow the amount required of 210k is borderline, you could consider paying off the debt to improve it.