I’m looking to get a mortgage in a few years

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I’m looking to get a mortgage in a few years

Post by Guest »

Hi, I’m just looking for a little advice on a situation I’ve got my self into. (Sorry for the length of this!)

Over the past few years, I have taken out too many credit cards and due to a change in work, I’m now struggling to pay each of these cards minimum monthly payments. I have also took a loan out to clear my largest credit card however due to something out with of my control happening, I’ve ended up using this card again.

I’m looking to get a mortgage in a few years and move out from home so I don’t particularly want anything major on my credit file to stop this happening

I was looking online and I’m able to get one loan which would pay off all my credit cards (which I would then close and cut up to never use again!) and my loan too.

I’ve calculated my current monthly outgoings on my debt and compared this to the loan I googled.

The loan would be saving me £250ish per month from the other interest which is being added on each of the cards however this would be paid over 5 years.

What I’m really looking for is advice to see if anyone has been in a similar situation who has used one loan to pay off all other debts, would this affect me badly when it comes to applying for a mortgage in a few years? One larger loan compared to having many credit cards?

Apologies for the long post, thank you for any advice you wonderful people all have!

P.s. I will also be paying any extra towards this larger loan when possible as my financial situation should be improving in a few months again.
Emma

Re: I’m looking to get a mortgage in a few years

Post by Emma »

I can’t say In terms of your credit score for your mortgage but if that would actually save you money then I think it’s a good idea, depending on your amount of debt its a good idea to look at a 0% interest credit card, that way you can consolidate your debts but have no interest to pay.
Emy

Re: I’m looking to get a mortgage in a few years

Post by Emy »

I think it would be help flip to use Martin Lewis’s credit club. They can tell you what loans would be good. However it might be because of your current situation they you are not eligible for a loan. It would be worth seeing what 0% balance transfers credit cards you can get so your not paying interest. As with a loan you would probably pay more interest. I am in the same position, however all my debt is on 0% interest credit cards so don’t actually pay much interest and then switch before interest is due, if that makes sense.
Lisa

Re: I’m looking to get a mortgage in a few years

Post by Lisa »

I think loans are better viewed by lenders for things like a mortgage that credit cards, because theres a schedule of repayment, with credit cards it’s higher risk as you could go and spend it all again (not that you would but the possibility is there) why not have an appointment with your bank and ask them?
Darren

Re: I’m looking to get a mortgage in a few years

Post by Darren »

I think it's a good idea if it will save you money, but it may well affect your mortgage. This I'd going to sound harsh and I'm sorry if it does but lenders will be looking at how you manage your money and from what you've written that's not very well . If you can make serious headway into getting that debt paid off it will a) look a lot better and B) actually mean you've learned how to manage your money better. Good luck.
Helen

Re: I’m looking to get a mortgage in a few years

Post by Helen »

Martin Lewis program tonight was all about debt. If you can, watch it on catch up, as it may help you.
Charlotte

Re: I’m looking to get a mortgage in a few years

Post by Charlotte »

Just another idea, when you do get a mortgage, you have the option to consolidate debt within that mortgage, obviously pending your deposit & affordability. It may be worth talking to a mortgage advisor as they may be able to put your mind at rest.
Karen

Re: I’m looking to get a mortgage in a few years

Post by Karen »

Watch the Martin Lewis show that was on ITV tonight he covers all what you’ve asked. But in summary he advises better to use a credit card with 0% balance transfer and regularly pay that off. But DO NOT spend on that card!

Also always pay your card/loan/debt off first that is charging the highest interest.

But watch his show it’s very helpful. Also he gives advice about contacting agencies that would help you manage your debt. They are very supportive. Good luck.
Jess

Re: I’m looking to get a mortgage in a few years

Post by Jess »

Look up Dave Ramsey baby steps. Cut up the cards, Pay off smallest to highest debt. By taking out yet another loan, you aren't correcting the behavior at the root. Get a side hustle if needed for extra income to put towards debt.
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