What would you do?

[Coffeeonadrip]

Hi! I'm after a bit of advice with the house/money situation. We are currently renting.
We have been given a cash gift by a family member, say 20 grand.
We also have a debt of the same amount.
We would like to buy our own house, the mortgage by my rough calculation would be the same as the rent we pay now or thereabouts.

Do we:
A) use the gift cash to pay off the debt and then it will take us absolute years to save enough for a deposit
B) keep cash in an isa or something until we have paid off the debt?
C) apply for a mortgage now and use the gift as a deposit? How having a debt would look like to bank?
Any other options??
The debt paying off is going slow but with the current earning prospects it could get faster soon but even if, we're still looking at 2 years or so...

Grateful for any thought or ideas!

If you apply for a mortgage they will take the debt into account when looking at your affordability. Have you used an online calculator? You could see if they will lend you what you need with that deposit, as it may rule the option in or out for you.

I've just got a mortgage with Overall debt of £22k and had no problems. Id use the money for deposit

I can’t see the point in option B unless you earn more in interest than you pay on the debt.
I’d try to get a mortgage.

Thanks for your advice! All the debt is on 0% credit cards so no massive interest payments luckily