10% deposit & clear debts VS 17% deposit with debts for land

Hi all, need some advice on bank loan.
We are thinking of buying a land in Sydney which is already registered. We have the 10% deposit. We will be able to save the stampduty in another two months. Also kept some extra for fees.

Now we have around 6-7% of that money extra.
We also have around Same about of debt (6-7% of the land price worth) , both my and my hubbys creit card and both have car loans.

Is it a better idea to use the extra 6-7% to pay off most of out debts and apply for land loan after 2 months with 10% deposit? I am a medical professional to I will be able to get the LMI waved anyway.

Or as my husband is saying, should we keep the credit card and expensive car loans as it is and apply for land loan with 16-17% deposit?

Which one will help us getting a better interest rate?
Any advice will be helpful as is it our first time in buying property and any bank/ brOker we ask, give us very vague answers and ask us to select and finalise a deal first. I think i should know how it works before I make a commitment.
Thanks everyone

The interest rate on a secured land/house loan is much lower than on car loans, and a fraction of that on credit cards.

What would be gained by 17% deposit? It won't affect the LMI situation. You'd still have the same amount of total debt, and having credit card and car loan debt means that you'll be paying much more in interest. On the information given, this sounds like a no-brainer to me.

thanks algernon, I was thinking in the same line but was'nt sure if i was right. thanks again

Always try and get rid of the debt, esp higher interest credit card debt. At least that's what my broker told me, the interest on credit cards is not worth it and there is no benefit to having a bigger deposit if it's being eaten away by debt + interest.

It actually comes back to income & timing for your build & what you might need to hold back for finishing items on the home (landscaping etc) - yes it won't affect LMI having more deposit and definitely makes you a better prospect with fewer debts - but if your build tender goes up and you've effectively spent what would have been the deposit on this you could lock yourself out. The reason we are cagey as brokers at this stage is we cant give you the right advice without knowing the whole picture - having said that you only have to have a conversation with a broker to get the advice - NOT select the loan yet. And we help you choose which loan based on your bigger picture when the time is right.

So on the very top level absolutely makes sense to save that interest and what you are currently paying on repayments can tip back into the savings subject to the above, but don't take that as advice until you've explored the whole picture.