Buying a house with debt...

mommyto5 · 10-08-2002, 08:24 AM

We are really going to need to move to a bigger house in the next year or two and I was wondering if it is hard to get a mortgage when you have credit card debt? We are working really hard to get it all paid off but I know it won't be in the next two years. We bought the house we are in now 10 years ago right after we were married and didn't even have a credit card. Now we are in too much credit card debt and going to do everything to get it down in the next two years before we want to sell our house. We will probably need the equity out of our house to pay for the down payment and the closing costs of the next house. We are busting at the seams here but the kids are so small they don't really mind now but I do!! I am going crazy!! Thanks for any advice.

Amy
mommy to Madison 7, Riley 5, Macy 3, Rhett 16 months and baby due in June!!!

i.m.cheap · 10-08-2002, 08:32 AM

I found it very easy to get a first time mortgage, last October. I couldn't have been more suprised when we were approved. We got an FHA loan, even though my credit is less than stellar. Good luck!

captclearance · 10-08-2002, 09:09 AM

How you've paid the debt is very important..... What % of your income is needed to pay the debt... and even more important is, do you have more available credit..... If you have open cards and can get into more debt will factor greatly with the bank... They may ask you to close the accounts if you haven't already... Having clean CC with available credit or an open credit line is really just as bad to the bank as the debt itself... Check with a lender to see if you pre-qualify........

Jenlee · 10-08-2002, 09:54 AM

I agree with Lori - go to the bank where your checking/savings accts are and ask them to run a credit report for you to pre-qualify. Then get them to tell you whether to save up for the sown payment, pay down your existing mortgage, or pay off the cc debt.

The most important thing is whether you pay your monthly bills on time or not. If you pay them of time, you can have a higher % of cc debt.

Good luck.

bamamomto4 · 10-08-2002, 10:16 AM

I know with us,the more debt we have,the more credit we can get LOL!!! Not that I would recommend getting way over your head though

Is the FHA the same as the Fannie Mae? I've heard lots of good things about Fannie Mae....Just a thought

nealy · 10-08-2002, 10:24 AM

We are in the same situation however we are at the point where it is student loans that are making it impossible to qualify for a loan. Our first mortgage at the tender of age of eighteen was encredibly easy to qualify for but.... now we have credit card debt and student loans. I called our bank to prequalify and my Dh doesn't make enough money even with a large downpayment. We will have to wait until he graduates and makes more money. The rule of thumb is that with pretty good credit, most mortgage writers won't let your payment take up more that 38% of your income. We have excellent credit so they possibly could write us for 46% but that is pushing it. SO..... for now we wait.

nealy