However, here's the catch 22. I pay off all of my debt, which after some time, looks GREAT on paper....however...bad for the bank because then my downpayment money will be gone!
My debt is not bad at all - $5000 max (1 cc and 2 student loans), Is it a bad idea to go into a home with that much debt, even though i'm making the timely payments?
2006-07-29 17:46:40 · 9 answers · asked by KT 2 in Business & Finance ➔ Personal Finance
Well, hun, you can't pay them all off, or you won't be able to buy the house, right? I mean, they're expecting the downpayment, so if you don't have it, you can't buy the house. Anyway, no one really expects you to have paid off the student loans completely. Just keep making regular payments on them. It would be nice to have the credit card paid down as far as you can, but don't dig in to the $5000 at all. The big thing is to have your regular payments made anyway.
As far as buying while your in debt, obviously it's better if you can get rid of as many debts as possible first, but as long as your budget still works after the purchase, I don't think it's a bad thing. Have you analyzed your budget? Do that first, for either buying or not buying, and see how it comes out. If it looks as good or better after buying the house, then you might as well go for it.
2006-07-29 18:04:58 · answer #1 · answered by Anonymous · 0⤊ 0⤋
how much interest are you paying for the 5000 you owe. I'd say a) pay it all off and b) put some of the money in a cd or something for a year or six months. if you have the downpayment, you can definitely do a and b, and in six months you could probably put the 5000 back into the downpayment total. i guess you can call it borrowing from yourself
2006-07-29 19:32:29 · answer #2 · answered by Ivan P 2 · 0⤊ 0⤋
If your credit rating is good you should be able to get the home you want.............
I would, if I had the money, pay off most of my debt b/4 I made another hugh purchase.............
Owning your own home is one of the best investment you could have......
Having some debt and paying on it monthly and on time, is good, because it keeps your credit rating up.....
You may also tack your current loans onto your new home purchase(combine the two) to make one payment...Any bank should do this for you.....Some states allow a discount if you are a first time home buyer....Check with a realtor always......Good Luck!
2006-07-29 17:58:25 · answer #3 · answered by mom of a boy and girl 5 · 0⤊ 0⤋
the question can't be answered without knowing your income to debt ratio.(how much you owe vs. what you make) however underwriters almost always prefer to see steady payment discipline as opposed to wow I hit the number (lump sum pay-offs).If paying off the money you owe interferes with your mortgage payment you aren't financially strong enough yet. housing at the max shouldn't take more than 35% of your monthly net income. 25% is the ideal but kinda unrealistic in some regions.unless you are doing 6 figures or better annually. good luck.
2006-07-29 17:59:56 · answer #4 · answered by unklkvn308 2 · 0⤊ 0⤋
Paying off debt in a timely matter looks better on your credit report because it shows you are responsible and efficient. Just the fact that you have three account you owe something on is something to be proud of. I think you can get a good deal. I don't think you should squander the down payment.
2006-07-29 17:51:46 · answer #5 · answered by tiger_lilly33186 3 · 0⤊ 0⤋
Pay your debt in payments - just pay more than the minimum so that you are paying it down faster. Be conscious of every dollar you spend and every time you want to spend on something you don't need, like Starbucks coffee or a video, pay yourself instead. Put that extra cash in an envelope and at the end of the week deposit it back into your checking account.
2006-07-29 17:51:03 · answer #6 · answered by nquizzitiv 5 · 0⤊ 0⤋
I beg you -- do NOT buy until you have paid off your debt. Invest some cash in a short book - 'The Total Money Makeover' by Dave Ramsey- before you take this plunge.
You wiil be laughing all the way to the bank a few years from now!
2006-07-29 17:54:04 · answer #7 · answered by Anonymous · 0⤊ 0⤋
if someone wants to get out of debt today it is pretty easy with a debt consolidation plan
however it may get a bit tricky at times, I suggest you get as much information as possible online on this first,
a good place to start in my humble opinion is:
http://umgarticles.atspace.com/debt-consolidation.htm
2006-07-30 22:20:43 · answer #8 · answered by Anonymous · 0⤊ 0⤋
No you can carry the debt, but the faster you pay down on it the less interest you will have to pay.
2006-07-29 17:53:27 · answer #9 · answered by quikzip7 6 · 0⤊ 0⤋