Is it possible to buy a home with credit card debt?

We are a miilitary family and due to move in a few months. We have credit card debt that we are working on paying off. Is there anything we could do to qualify for buying a home before we pay off the balances or should we just rent and continue to work on our debt?




Is it possible to buy a home with credit card debt?
Pay of the balances as quickly as you possibly can and then start saving for your down payment. Save until you have 20% for the down payment so that you don't have to pay PMI. Lenders are more likely to give you a mortgage (fixed rate only please) if you have a 20% down payment because you are then a "better risk". To help you along:





A. Have a garage sale and sell anything that you no longer need or want.


B.Get a temporary part time job, if you have one, get another. The holidays are coming and there will be plenty of temporary jobs available. It is better to have a no fun year or two than a no fun decade.








Here is a plan that can help you. If you work the plan, the plan will work for you:


1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Put everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an "emergency fund" category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don't even have to worry about it. You must cut your spending and live on less than you make.





2.First get current on all of you debts and make no more late payments. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.





3.Pay the minimum due on all of your debts and then put your extra money towards paying off the highest interest one first. After you get that one paid off, you put the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off faster. When that is paid off, you put all three payments towards card #3 and that one will be paid off pretty quickly. As an example:





To start :


Debt #1 (highest interest): minimum payment+ extra payment


Debt #2 (middle interest): minimum payment


Debt #3(lowest interest): minimum payment





Debt #1: paid off


Debt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra payment


Debt #3: minimum payment





Debt #1: paid off


Debt #2: paid off


Debt #3:Mimimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.





That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late payments. This works no matter how many different debts you may have.





4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Put that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.





5a. When you have your emergency fund in place, add a category for "fun" to your budget. Save for a holiday, a vacation, a big screen, or dinners out, whatever goal you want. Remember to enjoy your life.





5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money? Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.





5c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.





You can do it and it isn't as hard as you think. Just follow the plan.



Reply:Absolutely. The way it works is the mortgage companies look at your debt to income ratio. Basically they look at home much money you make against how much you are required to pay in bills each month. If they find that you owe more than 50% than you make each month then they may not pre-approve you.





So if your minimum payment is low enough in addition to other debts then you're fine. There's no harm in going to a bank and getting pre-approved. That doesn't affect your credit. The best advantage you would get is that the bank could tell you exactly how much you would need to pay off of your credit cards before they could pre-approve you.





Don't be scared, you may be better off than you think.
Reply:Pay off the credit cards. Carrying balances of more than 30% of your available limit, hurts yourscore. Pay off the credit cards and you get a quick boost to your score.





In the current economy, you need very good credit to qualify for a mortgage. Qualification requirements are much stricter, including debt to income ratios.
Reply:don't worry there are online sites which solves your debt problem by getting you enrolled in online program and the entire process can be handled from the comfort and convenience of your home or office.you can always speak with one of helpful account specialists who are standing by to assist you with any questions that you may have. thanks
Reply:


here are some search results


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