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With your active consumer accounts, I would pay those down today. You have about 78% Utilization, and if you pay those down to 9%, you'll see a bump. So that's about $2K I'd pay off today. Going forward, put a recurring bill or two that total about $250 a month one or two cards. Let it report on your billing in statement, but PIF before the grace period is over. Don't pay interest on these accounts.
Although that's a shocking amount of car debt / stupid tax as Dave would say, the good news is with your income, you're about at the threshold of what you can have in cars and prob work your way through it. You are correct, do NOT refinance any of your loans or app for ANYTHING if you are hoping to app for a mortgage in 6-8 months. I would even be wary of opening that secured card Brooks and I mentioned above. Put yourself into emergency/ice mode. No apping. No unneccessary spending.
Are you keeping a written monthly budget? Is your rent high? You have a great income and even with the car debt, it seems like you should be able to throw more cash at savings and debt. You do have a good savings of $15K, how long did it take you to save that up?
Do you have anything you can sell? Camper, boat, motorcycle, livestock, instruments, jewelry, watches, etc?
Here's the thing about your situation, and I've been there.. you are in the perfect position to be poised to really win with your money, BUT you have a lot of liability right now... and a house will be more liability... the reason I stress the cleanup is if one of you temporarily loses income; all the hard work you've been doing could quickly get wiped away as you're running your cash so tight.
Another question - What price point home are you hoping to purchase in 6-8 months?
@mamatried wrote:With your active consumer accounts, I would pay those down today. You have about 78% Utilization, and if you pay those down to 9%, you'll see a bump. So that's about $2K I'd pay off today. Going forward, put a recurring bill or two that total about $250 a month one or two cards. Let it report on your billing in statement, but PIF before the grace period is over. Don't pay interest on these accounts.
Although that's a shocking amount of car debt / stupid tax as Dave would say, the good news is with your income, you're about at the threshold of what you can have in cars and prob work your way through it. You are correct, do NOT refinance any of your loans or app for ANYTHING if you are hoping to app for a mortgage in 6-8 months. I would even be wary of opening that secured card Brooks and I mentioned above. Put yourself into emergency/ice mode. No apping. No unneccessary spending.
Are you keeping a written monthly budget? Is your rent high? You have a great income and even with the car debt, it seems like you should be able to throw more cash at savings and debt. You do have a good savings of $15K, how long did it take you to save that up?
Do you have anything you can sell? Camper, boat, motorcycle, livestock, instruments, jewelry, watches, etc?
Here's the thing about your situation, and I've been there.. you are in the perfect position to be poised to really win with your money, BUT you have a lot of liability right now... and a house will be more liability... the reason I stress the cleanup is if one of you temporarily loses income; all the hard work you've been doing could quickly get wiped away as you're running your cash so tight.
We do have a strict budget. Our rent is only $300 per month. It took about 5 months to save up $15k.
We do not have anything we can sell, unfortunately.
Also we were looking at purchasing a home in the $280k range.
Oh wow! You guys are doing GREAT! $300/mo rent is AWESOME for saving and getting out of debt. I would ride that train as long as possible to hit debt and save save save. Very nice job! If you guys are able to stick with that budget, that gives you another $18K-$24K over the next 6-8 months.
If I were you, I'd use the money you've saved to:
1. Pay down current cards to 1-9% utilization ($2K) - - do not put more than $250/mo on these cards and PIF each month
2. Start campaigning for PFDs on your smallest collections with $4K of your current savings
3. Try to negotiate that $9K repo car as a PFD or Settle / Remove Lates
4. Cash flow the remaining $2K or less in collections (preferably PFD)
5. Continue saving $3K+ a month, paying minimums on your cars/student if you HAVE to buy in 6-8 months, otherwise throw $3K+ a month at car debt and student debt until you're debt free.
You are right, you will want at LEAST $15K in the bank if your goal is to get pre-approved for an FHA Loan on $280K. You'll need 3.5% down, plus $$ for apprasals, inspections, repairs, moving and closing costs if you don't get them seller paid / in the deal.
You are on the right track. It's just about prioritizing right now. No refinancing / apping / financing anything.
@mamatried wrote:Oh wow! You guys are doing GREAT! $300/mo rent is AWESOME for saving and getting out of debt. I would ride that train as long as possible to hit debt and save save save. Very nice job! If you guys are able to stick with that budget, that gives you another $18K-$24K over the next 6-8 months.
If I were you, I'd use the money you've saved to:
1. Pay down current cards to 1-9% utilization ($2K) - - do not put more than $250/mo on these cards and PIF each month
2. Start campaigning for PFDs on your smallest collections with $4K of your current savings
3. Try to negotiate that $9K repo car as a PFD or Settle / Remove Lates
4. Cash flow the remaining $2K or less in collections (preferably PFD)
5. Continue saving $3K+ a month, paying minimums on your cars/student if you HAVE to buy in 6-8 months, otherwise throw $3K+ a month at car debt and student debt until you're debt free.
You are right, you will want at LEAST $15K in the bank if your goal is to get pre-approved for an FHA Loan on $280K. You'll need 3.5% down, plus $$ for apprasals, inspections, repairs, moving and closing costs if you don't get them seller paid / in the deal.
You are on the right track. It's just about prioritizing right now. No refinancing / apping / financing anything.
@mamatried wrote:Oh wow! You guys are doing GREAT! $300/mo rent is AWESOME for saving and getting out of debt. I would ride that train as long as possible to hit debt and save save save. Very nice job! If you guys are able to stick with that budget, that gives you another $18K-$24K over the next 6-8 months.
If I were you, I'd use the money you've saved to:
1. Pay down current cards to 1-9% utilization ($2K) - - do not put more than $250/mo on these cards and PIF each month
2. Start campaigning for PFDs on your smallest collections with $4K of your current savings
3. Try to negotiate that $9K repo car as a PFD or Settle / Remove Lates
4. Cash flow the remaining $2K or less in collections (preferably PFD)
5. Continue saving $3K+ a month, paying minimums on your cars/student if you HAVE to buy in 6-8 months, otherwise throw $3K+ a month at car debt and student debt until you're debt free.
You are right, you will want at LEAST $15K in the bank if your goal is to get pre-approved for an FHA Loan on $280K. You'll need 3.5% down, plus $$ for apprasals, inspections, repairs, moving and closing costs if you don't get them seller paid / in the deal.
You are on the right track. It's just about prioritizing right now. No refinancing / apping / financing anything.
Thank you for all of your advice. Patience is not my strong suit but I understand the advantages.
You and I both, sister! If I had patience, I never would of needed this forum... lol
but it all works out! 5 years of grinding and I'm closing on my first home on WEDNESDAY of THIS WEEK!
@mamatried wrote:You and I both, sister! If I had patience, I never would of needed this forum... lol
but it all works out! 5 years of grinding and I'm closing on my first home on WEDNESDAY of THIS WEEK!
CONGRATS!!!