Your Questions About Pay Off Credit Cards Or Save

Thomas asks…

When trying to buy a house, is it better to pay off credit cards or save for a down payment?

Me and my girlfriend are trying to buy a house for the $8000 1st time homebuyer credit. We have some outstanding credit acrd debt. Should we focus more on paying down the credit card debt or saving so we can have a down payment?

richmama answers:

I would pay off the credit card.

Plus NOW you can get the 8000 credit upfront to use as your downpayment. This JUST happen!!!

Nancy asks…

Pay credit cards off or save for a rainy day when buying a house?

My wife and I are wanting to buy a house. We are going to us a VA loan. We have approx. 7,000 in CC debt. I had a saving account from the military with around 6,000 and an IRA with around 7,500. Would we be smarter to use all 6,000 to pay the CCs way down or pay in monthly installment’s and save the 6,000 for other emergenicies?

richmama answers:

Pay down the CC’s! Don’t hold on to that liability of debt going into a home purchase. The debt might actually hurt your best loan interest rate on the home loan.

After the CC’s are paid off, then save up the final costs, making the adjustment to mortgage payments that much easier on you both.

Be blessed,

Mary asks…

Pay down credit cards or save for a house?

Now that the market is out of whack, I am guessing that lenders are going to make touger requirements for giving mortgages. I want to buy a house in 6-8 months. Right now I have about $2000 a month to either save for a house or pay credit cards. My debts including school loans are at $15,000 so it should be paid off after 8 months or so. My monthly minimum payments for these debts are $150.
Many of the house mortgages want a down payment rather than 100% financing. 5% down payment of the place we would want is $17,500.
So is it pay down debt or save for the house?

By the way, the lenders I have been talking to don’t look at my entire debt. They consider my monthly minimum payments when computing ratios.
Eddie J- If you can’t read, maybe you shouldn’t post here. To clear the confusion, I pay $2000 a month on credit cards. In 8 months, I will be paid off. If I save for a house instead, I will be paying the $150 MINIMUM payments for my debts.

richmama answers:

If you pay down some of your debt ypu will get a better interest rate.

Ruth asks…

pay off credit cards or save?

I owe $1300 on two separate cards and just received a work bonus for $1300. Both of my cards have a $2000 limit. Is it better for my credit score to put that money equally down on both cards, payoff one of the cards, or save the money for an emergency fund? My credit score is around 670 and trying to increase it and possibly buy a home later this year.

richmama answers:

Pay $1000 on the card with the highest interest rate, and pay $300 on the other one. Then focus on getting the one with the lowest balance paid off.

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