Advice as first time buyer

buyingin2023

I posted this on the house buying board but was advised to repost it here.

Me and my partner have 15k already for a deposit, this time next year we will have 18k without saving anything extra, just from bonuses from lifetime ISA and help to save scheme (been on UC while I was on mat leave). However obviously we will be actively saving on top of this so we will have more! We've been getting by for the past year while I was on SMP and my partner working agency shifts so not been able to save properly during this time apart from £50 a month in help to save which is all we could spare. I'm going to be in full time work and my partner is hopefully going to get a part time job (rather than agency) so he has stable income for mortgage application as well. 

The thing is I have 3k on a credit card. It is 0% for the next 28 months, nothing else will be put on this card as it was only opened for one balance transfer for a necessary large purchase. I do use my other credit cards for all purchases to make use of paltry cashback as well as some added security, and this is always paid in full every month. I could easily use 3k from savings to pay off the balance transfer card. Basically, is it better to have the 3k towards a deposit or have 3k debt when applying for a mortgage? 

We also have some bits on interest-free finance and in total the repayments will be £74 monthly but will only have a year left on these when we plan to apply for a mortgage. I assume these won't be a problem, or is it worth paying it off? This includes a mobile phone on contract (partner's choice). We don't have a car on finance.

I have £15k available credit on credit cards. Is it good or bad to have this amount of available credit? My credit utilisation is always low. I always thought it was good to have more available credit with low utilisation, but someone told me it can go against you in a mortgage application.

We are just going to buy something small and cheap, I fear we will be saving forever otherwise and will miss our chance to get on the property ladder. This is why I really want to start the process next year!

Any advice regarding the above is appreciated.

penners324

You're better off having as little debt as possible when applying for a mortgage. 

Though 1 phone contract each won't be concern (everyone has 1) to the mortgage company.

The credit card on 0% is best left as it is until a month or 2 before the mortgage application, then clear it in full. Obviously carry on paying the minimum payments (just above would be better) every month.

High credit availability maybe a concern if you're on a relatively low wage. But don't worry too much about that at the moment.