WHAT WOULD YOU DO???

[nvrgiveup08]

Preparing to apply for a mortgage in July/August. I currently have about $7500 in savings. My family is living with my inlaws until we buy a home at the end of this year. I owe $466.25 with a $700 limit on one card and $305.00 with a $400 limit on another card and $427 with a $1900 limit on another card. Should I pay down the card balances all at once or pay one off a month so I wont dip into my savings? Scores are a 648, 626, and 620. My husbands scores are a 720, 716, and 722 but he owes $982 on a student loan due out of default in July/August he is in the rehab program and he also owes about $2500 to the IRS but we are on a monthly payment plan. I just dont know whats the best action to take. I hate to take any money out of savings. Our only bills are the credit cards, car note for $419 and gym dues of $56 and food, gas and kids tuitions of $350 mth.

[JM-AM]

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@nvrgiveup08 wrote:

Preparing to apply for a mortgage in July/August. I currently have about $7500 in savings. Good Job saving so far.

My family is living with my inlaws until we buy a home at the end of this year.

I owe $466.25 with a $700 limit on one card and $305.00 with a $400 limit on another card and $427 with a $1900 limit on another card. Should I pay down the card balances all at once or pay one off a month so I wont dip into my savings? Pay the $466.25 in full, pay the $305.00 in full, and pay $300.00 to the last card. Total paid out $1071.25. This should help increase your scores.

Scores are a 648, 626, and 620.

My husbands scores are a 720, 716, and 722 but he owes $982 on a student loan due out of default in July/August he is in the rehab program and he also owes about $2500 to the IRS but we are on a monthly payment plan. IRS on monthly payment plan is usually okay, depends on lender. Student Loan in rehab is also usually okay, but also depends on Lender. Some Lenders will want the payments to be made for a period of time, and some will be okay as long as you are in a repayment and or rehab agreed upon plan. Different Lenders have different requirements, but it is very acceptable situation for some Lenders.

I just dont know whats the best action to take. I hate to take any money out of savings. Our only bills are the credit cards, car note for $419 and gym dues of $56 and food, gas and kids tuitions of $350 mth.

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Depending on how much home you are trying to buy, do you make enough money on your own to afford the home? Are you in a Communtiy Property state?

If I was in your situation I would bring your scores up just so it makes it a little easier, and if you qualify for income, and DTI and any other qualification I would go ahead and apply. But if you do not qualify because of income or DTI I would apply with husband and find a Lender who is okay with the IRS repayment plan and School Loan Rehab plan.

[MovingForward_2012]

If both of you are going to try to qualify, I would pay down those cards ASAP even if it means dipping into savings so that you know where you truly stand because in the event paying down the cards isn't enough, you want to allow ample time to fix whatever else needs to be fixed. Just divide the total amount paid to credit cards by 4-8 and have that amount automatically deposited back into your savings account each week so you know it will be replenished by a certain date. I would also research this board regarding student loan rehab programs to make sure your husband has paid the min amount of payments to clear CAIVRS.