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Pay off wedding loan or save for mortgage

  • 28-08-2013 8:44pm
    #1
    ftm2008
    Registered Users, Registered Users 2 Posts: 222 ✭✭


    I got a wedding loan of 15k which I have to pay off over 5yrs. I had starting saving for a mortgage which I have just over 3k saved. I have approx 4k left over after wedding so what do I do with it b this.
    Should in invest in in the loan or add it to may savings to try build up a deposit


Comments

  • #2
    foxy06
    Registered Users, Registered Users 2 Posts: 2,138 ✭✭✭foxy06


    ftm2008 wrote: »
    I got a wedding loan of 15k which I have to pay off over 5yrs. I had starting saving for a mortgage which I have just over 3k saved. I have approx 4k left over after wedding so what do I do with it b this.
    Should in invest in in the loan or add it to may savings to try build up a deposit

    You wont get a mortgage with that loan ao I would pay it off that.


  • #3
    NinjaTruncs
    Registered Users, Registered Users 2 Posts: 2,528 ✭✭✭NinjaTruncs


    The fact that you have a loan outstanding will hugely impact on mortgage approval, probably more so than the fact that you have no savings.

    However you are going to need savings before you can get a mortgage, so it's a bit of a catch 22 situation.

    What is your salary like, would you be able to comfortably pay off your mortgage and loan and still have a sizeable amount of disposable income left over? If you finances are tight after paying a mortgage and loan it's unlikely you will get the mortgage.

    4.3kWp South facing PV System. South Dublin



  • #4
    ftm2008
    Registered Users, Registered Users 2 Posts: 222 ✭✭ftm2008


    foxy06 wrote: »
    You wont get a mortgage with that loan ao I would pay it off that.

    Yes I know that but I'd I want to build up a deposit to say 16-20k or so do I'm thinking it would a good start..


  • #5
    Scortho
    Closed Accounts Posts: 3,876 ✭✭✭Scortho


    You'll save a lot more paying off the loan than you will having it in a savings account.
    It'll also flag up on the mortgage application when they stress test it. They want a squeaky clean application and while the loan may not prevent you from getting a mortgage it most likely will reduce the amount you get approved for.

    If it was me I'd pay off the loan as quick as possible and after that save like hell for the deposit.


  • #6
    BuffyBot
    Registered Users, Registered Users 2 Posts: 24,924 ✭✭✭✭BuffyBot


    Exactly: the savings made my paying off a loan (high % rate) vs what you might earn on a a low-paying deposit is one advantage, but also having the loan cleared before going for a mortgage


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