We want to buy this house and we are meeting with the banker on tuesday, but I am just curious about something. We have about $15k in credit card debt and pay about $1600 a month in credit card bills. We want to buy this house was will have about a $1500 mortgage payment. Now, if we had those credit card bills gone, that's basically the mortage payment.
Does anyone know if when we take out this mortgage, can we also take out a little more to take care of our credit cards bills and then we just have this one big payment for our mortage and our credit card bills.
I should not out that the house is worth $260, but we are only paying $235 for it so really, it's like we are getting automatic equity right? And that could be used to pay for some of the credit card debt. I'm just worried they won't want to give us the loan because they will say we don't have enough money to pay for the mortage because of the credit card bills. This is a great house, we don't want to pass it up!
2006-09-03 16:55:52 · 9 answers · asked by Amanda 2 in Business & Finance ➔ Renting & Real Estate
sure ( but you will pay the interest on them for 30 years ) and what you say is true about the cards as far as debt-to-income ratio ( but even paid off the potential debt will count as debt --you need to talk to your loan officer about the best way to proceed BEST would be to pay the cards off with a separate short term loan if you qualify ) ONE MORE THING you give a value for the home but the true value will be determined by an appraisal when you apply for the loan and you imply that you can finance for almost 100% of that value - that will depend on your credit rating ! you are best off NEVER getting a loan for more than 80% of value that leaves you a cushion ( most repos are for people who financed at 100% of value and then something changed ALSO STAY AWAY FROM VARIABLE RATES in today's market they are TROUBLE !!!! wish you luck )
2006-09-03 16:58:05 · answer #1 · answered by Anonymous · 0⤊ 0⤋
The house's worth is really up a number pulled out from a realtor's hat. You paid $235 for it, so that is what it's worth.
I'm assuming you are putting down 20% ($47,000) and getting a standard 30-yr fixed with 6% APR for the $198,000 balance. The payments would be $1187 per month. The only way you can have a mortgage payment of $1500 is if you have bad credit, because your interest rate would be 8.25%.
You NEVER want to securitize credit card debt with your house. The reason is that most people with credit card debt take out a loan against the house, pay it off, and in a year they start running up the credit cards again. Now you have a high mortgage payment and credit card debt.
The $15K in debt may not be a problem as long as your income is over $100K per year.
It might be a great house, but clean up your credit score first to get a better interest rate on the mortgage.
2006-09-03 19:02:20 · answer #2 · answered by Steve R 6 · 0⤊ 0⤋
It depends on the bank some banks will let you. Most only want you to borrow 80% of the homes worth anyway. The bank is only going to allow your debt to income ratio to be 42%, so your income b4 taxes needs to be over $7000/month. Some mortgage lenders will set up the 1st mortgage for the house and second one on the extra vaue as a second mortgage. The banker that you are seeing should help you get the best situation, especially if you have good credit
2006-09-03 17:05:06 · answer #3 · answered by momoney0103 1 · 0⤊ 0⤋
You can take a mortgage out up to the maximum that the bank will lend you. Think about it - if you owned a house free and clear that was worth $250000, you could take a mortgage out for 10k, 50k, 100k, 200k, etc. It's whatever you want and are willing to pay. Most banks will lend up to 80% of the appraised value, and many will do up to 100% or more.
However, keep in mind that if you borrow to pay off credit cards, you will now be paying interest on those card balances (albeit a lower APR most likely) for the mortgage term - up to 30 yrs or more. That can be A LOT of money. The typical borrower ends up paying close to THREE TIMES the original principal balance by the end of their 30 yr mortgage term!
Good luck!
2006-09-03 17:04:27 · answer #4 · answered by Anonymous · 0⤊ 0⤋
It is not as hard to get a mortgage as you might think. Do you have a decent down payment? Most people will pay their mortgage even if their other bills go unpaid which is why it's not too hard to get one. Most lenders will not lend you more than the house is worth so be sure your figures are accurate. You will need an appraisal to determine the value of the house before you go forward. Good luck!
2006-09-03 17:05:45 · answer #5 · answered by thrill88 6 · 0⤊ 0⤋
im pretty sure that all your info we be taken into account before you get approved for the loan, after you are approved then you can look at consolidating, that amount of debt will work against you unless you are earning a fair whack. you need to be able to prove that you can pay the debt and the moprgate at the same time so you will have to be able to pay off 3100 a month. after that things can change. altho im not sure you can do it with a credit card, you could always get a personal loan and pay of the balance with that and then consolidate the morgate and the personal loan, im know that that is posible.....good luck
2006-09-03 17:06:24 · answer #6 · answered by skippy 3 · 0⤊ 0⤋
john made an excellent point...you can pay off your cards but you will pay for a lon time. Better to pay off cards and destroy credit cards ASAP.
People who buy new homes tend to pay off their CC with the mortgage and then max out their cards with renovations....be wise and pay as you go!
2006-09-03 17:05:27 · answer #7 · answered by newsgirlinos2 5 · 0⤊ 0⤋
Pay your credit cards off first before taking on additional debt.
2006-09-03 18:41:00 · answer #8 · answered by ? 3 · 0⤊ 1⤋
You should be able to. I know my bank asked me if we wanted to do the same thing when we bought our house.
2006-09-03 17:01:28 · answer #9 · answered by deathdealer 5 · 0⤊ 0⤋