Moving, save money or pay down debt?

Question

We are thinking about moving within the next year (give or take a few months) what is your opinion on saving as much as possible to put down on the new house, or paying down some credit card debt before the move?

Answer 1

The opportunity cost of not paying down debt (saving) is the interest you will pay on the debt. How does the return on savings compare to your debt cost? Since you will need the money short-term for a downpayment, I suspect you are not going to save using risky assets. Hence, I bet you get a better return by paying down debt.

Also, I assume you know your credit score. Increasing the available credit difference generally improves your score. Given the slow down in mortgages, I suspect you can easily get around a lower downpayment (like an 80-10-10 or 80-20) if you have good credit and solid income flow.

Answer 2

Pay down your credit card debt. By doing this your debt to income ratio will be less when you go to qualify for your new home that you are purchasing. Also having open accounts with little to no balances will increase your credit score. That will give you a better opportunity to get a competive interest rate and qualify for creative financing if need be.

Answer 3

If you can afford to save the money and pay down the cards, get them to below 50% of their max, because that will make your credit score go up. Then take what you have left and hold on to it, because if your score is above 575, you can get 100% financing through a conforming/Fannie product (depending on some other factors, as well), and you'll want to have money saved up for reserves and closing costs. You don't necessarily have to have a down payment, because Fannie loves to see reserves saved up. Ideally, 5 months' worth. If you can only do one, then save the money.

Answer 4

Pay down the credit card debt.

Answer 5

you're able to desire to purpose to do the two. determine how lots you're making in a month - subtract all your costs. How lots do you have left? Make an account with basically funds to maintain on your destiny homestead. whether that's in undemanding terms 20 funds one month and one hundred the subsequent. that's going to be greater handy to get a house with fairly of a down charge. shop paying on your credit playing cards which will help your credit once you're being "judged" for a house loan.