Advice on the best way to go

bern494

Hi all
Advice needed on the best way to jump: My Daughter took out a loan for me to use of £7000 with Cahoot. We have now got this loan down to owing £3500.
My Daughter now needs this loan reducing or paying off in order for her to get a reasonable mortgage. They tell her she's only allowed to borrow £55000. So this loan with Cahoots would need to be reduced dramatically or paid off in order for to borrow a realistic figure because of house prices.

I have been pushing her to go for a 0% move but she is unsure what to do.
I can now raise about £2000 to pay off the loan but is it better to pay that to Cahoot or balance transfer the whole amount and pay off the £2000 then.
Any advice appreciated
Bern

Chadsman

I am inclined to say pay off the £2000 to Cahoot yourself now, as doing it yourself will mean the money will get there quicker than if you wait for some other company to do it for you and there wont be the temptation to spend it in the meantime.

When you say 'I have been pushing her to go for a 0% move' do you mean you want your daughter to take out a 0% BT card to transfer the debt? It would be a lot better for your daughter if the debt is in your name not hers.
There are very few CCs (1? ...Egg) that allow you to BT a loan, but a small number of others from the MBNA stable will also allow you to BT to a current account.

HTH,

Reaper

Indeed. Moving a debt to a credit card will not help her get below £55,000 as the credit card debt will show up on her credit report just like the loan does so she will just as badly off as before.

If you are able to get a loan or credit card in your name then you can do it, but not hers.

Martinslovechild

The main consideration here is that the mortgage lender will look at your daughter's outstanding debt when assessing how much they are prepared to lend her. Regardless of whether the outstanding debt is with Cahoot or on a 0% card, it will be taken into consideration and deducted from any amount that they are prepared to lend.

I am assuming that you're not in a position to borrow yourself as you probably would have done so?

The other point is that even with the £3500 gone, I think that this isn't going to substantially increase the £55000 amount that they are currently prepared to lend her. If she's applying solely in her name, most banks will allow up to 3 times her salary (or 2.5 times joint salary if she's applying with a partner). Some banks/building societies may increase on that figure depending on her type of employment. For example, they will lend people in certain professions more. However, would even £80,000 be realistic? Without knowing where you live in the country, it's hard to determine. I know that it's still possible to buy a house in Bradford for £80,000 for example.

bern494

Hi
Thanks for the quick replies
My Daughter took out this loan in her name to help me pay off debts. I have been paying her back monthly amounts so she can pay off the loan as quickly as possible.
I don't think I would be able to get a loan in my name, so unfortunatly she has to remain the borrower. I have asked to change to use a 0% bt in order to reduce the interest. Now has a result of my pension coming in £2000 I can pay this off her loan to reduce her debt and increase hopefully the amount of morgage she can get has she is looking at houses at £60000 and above. We just want to know which is the best way to do it.
Bern