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Answers (7)
- Don Groff, "Austin Texas Realtor"
- Contributions:355
Lenders look at your total debt ratio. $10,000 in credit card debt has a payment of approximately $400. That is what the lenders will use to calculate if you qualify along with your other debts.
So it all depends on your total financial picture.
So it all depends on your total financial picture.
- Lelda Will, "Lelda Will"
- Contributions:3670
Unless you're wealthy and have other collateral to back at least 20% of the home's value, then no, you should not buy. What you can do is work on paying down your debt and saving at least 20% before buying a home to be as safe as possible.
Some wealthy people use low-cost lines of credit as a source for arbitrage, but it's rare. There are better options usually for HNW individuals.
Remember you're going to have 5%-10% in transaction and moving costs if you have to sell, and life is unpredictable. That's why we recommend never buying unless you have at least 20% equity/down payment, minimum 10% to keep you in a safer position. Wait until you're ready. :-)
Some wealthy people use low-cost lines of credit as a source for arbitrage, but it's rare. There are better options usually for HNW individuals.
Remember you're going to have 5%-10% in transaction and moving costs if you have to sell, and life is unpredictable. That's why we recommend never buying unless you have at least 20% equity/down payment, minimum 10% to keep you in a safer position. Wait until you're ready. :-)
- wetdawgs
- Contributions:26854
It is possible that you would qualify for a mortgage, but are you really ready? At the moment, your credit card debt suggests you are living beyond your means, so I don't think you are ready. While lenders will take your minimum monthly credit card payment into account when calculating debt to income ratios, do you really want to be paying the minimum and carrying the charge for that pizza at a horrendous interest rate for the next 10 to 20 years? You might end up paying $100 for a pizza that you thought cost $15.
Have you saved up a down payment? Minimum is 3.5% for an FHA loan. 20% is better because you can avoid hefty monthly mortgage insurance costs.
Have you saved up a slush fund for repairs? Houses are more than the mortgage and taxes, things go wrong. Furnaces go out, water heaters need repaired, the deck boards may rot and need replacing. Budget for 2 to 4% of the market value of the house for home maintenance annually. No one will bail you out, you have to have the money to pay for it yourself.
Do you have a 3 to 6 month emergency fund saved up? Your job may suddenly disappear, or your car get totally. Having an emergency fund makes it so normal life events are not an emergency.
When you've achieved all those, and paid off the credit cards, then you are ready to buy much more safely. (I'm a taxpayer who is very tired of bailing people out who chose to over extend themselves.)
Have you saved up a down payment? Minimum is 3.5% for an FHA loan. 20% is better because you can avoid hefty monthly mortgage insurance costs.
Have you saved up a slush fund for repairs? Houses are more than the mortgage and taxes, things go wrong. Furnaces go out, water heaters need repaired, the deck boards may rot and need replacing. Budget for 2 to 4% of the market value of the house for home maintenance annually. No one will bail you out, you have to have the money to pay for it yourself.
Do you have a 3 to 6 month emergency fund saved up? Your job may suddenly disappear, or your car get totally. Having an emergency fund makes it so normal life events are not an emergency.
When you've achieved all those, and paid off the credit cards, then you are ready to buy much more safely. (I'm a taxpayer who is very tired of bailing people out who chose to over extend themselves.)
- Pasadenan
- Contributions:21467
It is what those Realtors® keep trying to tell you about them wanting to "help" you live your chosen "life-style".
You "chose" to live in debt, and you will always be a debtor.
Remember, you were not "born" that way; it was a "choice"; even if you did inherit debt from your parents.
You "chose" to live in debt, and you will always be a debtor.
Remember, you were not "born" that way; it was a "choice"; even if you did inherit debt from your parents.
- Pasadenan
- Contributions:21467
What do you do? You pay off that debt, and you start thinking about the ramifications of purchasing on credit when you don't have income and funds to cover the purchase costs each time you are tempted to use such a card. And each time you make a payment, you look at how much higher the interest rate is for that card as compared to mortgage loans..., to convince yourself to NEVER carry a balance. In other words, stop going out to eat, and stop buying coffee, and stop buying new clothes, and stop buying gadgets, and stop going to movies, and stop using lights for no purpose, and stop driving where you don't need to go, and stop using air conditioning and heating when not really necessary, and stop buying the more expensive food items that don't keep, and cut down on the amount you eat, and walk more.
- Naima Sumner, "Dallas Ft. Worth PRO"
- Contributions:2849
You should apply for a loan where they will look at the whole picture of your income/debts as Kevin explained, any late payments in the last 12 months etc.
Can you afford a mortgage on top of a credit card payment of 10K even with the minimum monthly payment?
Naima
Can you afford a mortgage on top of a credit card payment of 10K even with the minimum monthly payment?
Naima
- Kevin Vitali, "MerrimackValleyHomes"
- Contributions:68
Depending on your income, the $10,000 in credit card debt may not be a big deal.
If you have good credit the bank will be looking for your bottom end ratio (housing expense plus all consumer debt- including credit cards, car loans, student loans, etc.....) be less than 40-41% of your gross income based on your credit score and the loan program.
When calculating your credit card debt they look at the minimum monthly payments.
If you have good credit the bank will be looking for your bottom end ratio (housing expense plus all consumer debt- including credit cards, car loans, student loans, etc.....) be less than 40-41% of your gross income based on your credit score and the loan program.
When calculating your credit card debt they look at the minimum monthly payments.
want to get a house but l have $10,000.00 in creditcards, is there what dol do.
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