What to do

[Sunnysideup]

Age: 36
Spouse’s/Partner's age: n/a

Annual gross income from employment or profession: 62k
Annual gross income of spouse:n/a

Monthly take-home pay €3,450

Type of employment: e.g. Civil Servant, self-employed : private sector

In general are you:
(a) spending more than you earn, or
(b) saving?
Saving €1k per month

Rough estimate of value of home
Amount outstanding on your mortgage: n/a
What interest rate are you paying? N/a

Other borrowings – car loans/personal loans etc: overdraft of 1k

Do you pay off your full credit card balance each month? I try not to use it

If not, what is the balance on your credit card? 600 balance on card

Savings and investments: 14k in savings

Do you have a pension scheme? Yes

Do you own any investment or other property? No

Ages of children: n/a

Life insurance: yes through work


What specific question do you have or what issues are of concern to you?
I'm hoping to buy a house next year, and want to try to get my finances in order..My intention is to save a further 250 per month in a demand account seperate to the 1k I'm already saving. Should i pay off the overdraft and credit card with the savings though, or would this be frowned upon when applying for a mortgage? I currently pay about 100 a month off it. I have already taken 1k out of savings to fund unforseen expenses.
Thank you!

 

[Coldwarrior]

I'd clear the overdraft straight away, makes no sense paying a high rate of interest on that while you've 14k in a savings account yielding little to no interest. Banks typically look back just 6 months when looking at savings history for mortgages so you'll be fine if applying next year, and regardless they'd likely prefer to see you not using an overdraft. It's not clear from your post whether you clear your credit card in full each month or not (you should), if the 600 balance has been carried over for a few months and is accruing interest I'd advise to also clear that straight away from your savings.

 

[Sunnysideup]

Thanks! The credit card was carried over but i changed banks so I'm not currently paying any interest on that. Im getting 1.5 % on the savings account. I'd like to just clear the o/d and close the account completely & top up the savings up monthy whenever i can!

 

[Coldwarrior]

Ok sounds you're on an introductory 0% on balance transfers with the credit card, I'd still clear the balance on this soon, at least before the regular interest rate (around 18% - 22%) kicks in. Maybe direct the extra 250 pm you mentioned to this before switching it over to savings once the CC is clear.

 

[Bronte]

It’s crazy that you are trying not to use your credit card yet you’re in debt that is carried over. Despite now being at zero interest. This should always be paid off every month. And cancel your overdraft.