Save for Down Payment or Pay Off CC?

[Anonymous]

Alright, been Employed with my company 6 years.
-$36,000 Gross
- About 720 Median Score
- Only Debt is a CC with $4,000 balance/$7,500 limit. - $100/mo payment
- Have about $9k cash for down payment
- Looking at houses in CA around $150-175k
- Financing FHA

I haven't been pre approved, that's why I'm here. Main question is, should I pay down that CC or save it for the down and closing costs? And besides that how does the situation and likelihood of me being approved look?

[cdtotten]

Save it for down payment. The only affect that paying the CC debt off would have is lowering your DTI by $100 a month. If your ratio is that tight that you couldn't be approved without the pay down, then a mortgage isn't the right thing to be doing now, but you are fine I'm sure.With FHA financing, your credit score doesn't matter if it is high enough, so adding the points from lowering your util won't be worth it from that standpoint.

That being said... paying interest on a CC is never a good thing, so never make minimum payments, and get it paid off as quickly as possible.

[Anonymous]

Thank you for the insight! I of course make payments of about $500 a month on that card...

[boomhower]

You already have enough for the DP and most of the closing costs.  That said, I always thinks it much better to start out in a home as close to debt free as possible. Depeding on your time frame of shopping I would pay off the card and be done with and use the money your were paying on it plus the interest to put back in the bank.  But if your time frame is short then continue putting money in the bank.