Consolidation Loan and mortgage application

Jimmerp85

Hi , I was in abit of a mess over the last few years. I had to retrain in my employment due to my back and took a substantial pay cut while doing so. Skip forward 4 years and I’m now In a position to save for a house as my salary is up to where it should be . I do however have the debt from that period that kept us afloat to now manage. I would like to consolidate all my payments into 1 monthly payment  approx 20.5k worth of debt I total. 

In 18 months when we think we will have enough money will loan balance be looked at it just the monthly repayment when looking at affordability? 

I had a string of loans during this period (approx 8) but all paid off on time etc not sure if that will go against me. 

just seeing if I should stick with what I’m doing or consolidate . Not sure what’s best for a mortgage application? 

Any advice would be appreciated ! 

RAS

Owing money reduces the amount that you can borrow for a mortgage, rather than being a reason to consolidate. 

I'd suggest going over to the debt free wannabee section and posting your Statement of Affairs for advice on clearing the debt. Consolidation will just extend the period your debt affects affordability.

Make it Palin you want to clear without defaulting.

Hoenir

Consolidation maybe the answer but the solution. As kicks the can down the road. Incurring far higher interest costs over the years. Stick with repaying the debts as they are. Ultimately you'll be in a far better place. 

Jimmerp85

Thanks for your insight . Going through everything a consolidation would take another 5 years but less pain. Paying everything off as I am is 3 years and abit less towards the house but atleast the amount isn’t going to get any bigger 

RAS

Are you doing the basics, like checking if you can get a 0% transfer for the any of it? And concentrating efforts on clearing the most expensive debt? 

If you are incredibly disciplined you can effectively buy daily stuff on a cheap card, then use your current account to pay the same off an expensive debt. So you average APR declines.

GixerKate

I would suggest doing things like the 0% credit cards etc rather than the formal consolidation route.  A mortgage advisor told me that banks dislike consolidation loans (considered higher risk) and to keep away from them from a mortgage perspective.