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I'm trying to figure out if I should buy now or wait until I'm credit card debt free. I currently make a six figure income (and I have a very stable job). I have a good credit score of 750+ with experian, transunion and equifax, and I currently pay $1730 per month in rent.
I am interested in purchasing a home for around 290-300K in MD. The problem is, I only have $12,000 in savings for a down payment, also I have 6K in credit card debt.
I know that I don't want to keep paying rental expenses, when that could be going towards my own mortgage. Should I buy now, or wait until I've completely paid off my credit card debt and have more money to put towards my down payment?
On another note, how do I amend the title? It currently states, "Am I bad candidate for mortgage at this time?" It should however state, "Am I a bad candidate for a mortgage at this time?"
Lets say you make $100,000 minimum, and worst case scenario you pay 25% tax rate. That leaves $75,000. Let's take out $20,760 for rent and you have $54,240 left over. I don't see any reason why you couldn't live bare bones for a few months and just pay off the credit card. No restaurants, no shopping, no entertainment, etc.
Sure you will qualify for a mortgage, but that doesn't solve the issue of you paying interest every month to a credit card company. For $12,000 card at 12% interest making minimum payments of $240 month, that's $1357 year in interest payments per year. Complete waste of money. If you continue to make minimum payments it will take you 346 months (28 years) to be rid of your debt. In that time, you will pay $11,545.64 in interest. Which would mean every time your running your card, your actual cost of that item is "double" now that is something to think about....
Just suck it up and sacrifice for a few months and pay it off.
Lets say you make $100,000 minimum, and worst case scenario you pay 25% tax rate. That leaves $75,000. Let's take out $20,760 for rent and you have $54,240 left over. I don't see any reason why you couldn't live bare bones for a few months and just pay off the credit card. No restaurants, no shopping, no entertainment, etc.
Sure you will qualify for a mortgage, but that doesn't solve the issue of you paying interest every month to a credit card company. For $12,000 card at 12% interest making minimum payments of $240 month, that's $1357 year in interest payments per year. Complete waste of money. If you continue to make minimum payments it will take you 346 months (28 years) to be rid of your debt. In that time, you will pay $11,545.64 in interest. Which would mean every time your running your card, your actual cost of that item is "double" now that is something to think about....
Just suck it up and sacrifice for a few months and pay it off.
Last month, I cut up both of my credit cards, and I'm currently paying down the debt and sacrificing tremendously. After I pay off the credit card debt, I will NEVER make a charge payment for items that I can't actually pay in full by the due date.
It's just a bit frustrating to continue paying very high rent, when that money could be going towards a mortgage.
If you really want to buy, you can do so now. You can go with a 5% down Conventional Loan, have the seller pay taxes/insurance/everything else, and get into the place.
But then you have to worry about the cost of the actual move itself, utilities, and other ancillary expenses. But you are a lot closer than you might think.
Last month, I cut up both of my credit cards, and I'm currently paying down the debt and sacrificing tremendously. After I pay off the credit card debt, I will NEVER make a charge payment for items that I can't actually pay in full by the due date.
It's just a bit frustrating to continue paying very high rent, when that money could be going towards a mortgage.
Six figure salary, less than $2000.00 rent, $6000.00 for credit card debt and you are sacrificing tremendously? I really do not understand that statement at all.
Do you have $12k in savings or $12k in savings for a down payment? You're treating it as if you need to rush into buying because you are throwing money away on rent. I would slow down a little bit. Pay off your obligations and then save up enough for an emergency fund and then save for your down payment. Given your numbers you could pay off the debt and save up a significant down payment in the next year or more if you really sacrifice. That will put you in a far better position than jumping in as quickly as possible to avoid paying rent. I assume no car payment since you didn't mention it.
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