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Is it better to have debt paid down or money for a down payment?

  • December 14 2013 - US
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Answers (5)

Profile picture for joespake
As a general answer, I would suggest paying down the debt.  There are plenty of low downpayment mortgage programs for folks with good credit and lower debt ratios.
  • December 14 2013
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Profile picture for wetdawgs
The simple overview is that the more debt you have that you are paying on monthly (or periodically), the less mortgage you'll qualify for.  
  • December 14 2013
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Profile picture for user3538106
Well, we have a high credit card balance & student loans & one car payment. My husband is a military member so we are eligible to go through the VA loans. I was thinking we should use our income tax to pay off one of our lower debts & put money on the credit card to pay it down. I wasn't sure if we should save our income tax for a home down payment. We are a one income family currently. Thank you
  • December 14 2013
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It would depend on the type of debt that you have and the amount as well as the type of loan that you are looking to get. When you are thinking about a home loan, it is important to think about your monthly revolving debt (how much your total monthly payments are). The higher this monthly debt amount is than the less you are going to be able to put towards a month house payment and therefore you will not qualify for as much. This is why you would want to pay down debt. On the other hand if you are able to put 20% down on a house than in most situations you would not have to have mortgage insurance. The best way to determine these details is by meeting with a loan officer as they could tell you what you would currently qualify.
  • December 14 2013
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... more info please...
  • December 14 2013
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