My husband and I are FINALLY in a place that we can actually start planning to buy a home in the next 6 months and under.
That said, I/we could use some advice. The VA loan will be in his name only. The thing is that we have about $40k that we are getting in the next 3-days (gift from my grandfather's estate and will have it properly documented) and wanted to know how to use it wisely as my husband does have some outstanding debt that we'd like to pay off.
We want to get approved for the maximum amount possible just so that we have some wiggle room (doesn't mean that we will go to the max) Does anyone have any suggestions on what would help him/us out the most?
Best Buy: $1250 / $3k Limit
Min Payment: $28 (no interest until 6/2020)
Citi Card: $4801 / $14k limit Min Payment: $119
Car Loan: $8,8972 Min Payment: $244.80
Amex: $11,316 / $20k limit Min Payment $328
Target Master Card: $11,819 / $13k limit
Min Payment $370
Discover Card: $18,112 / $21.5k limt
Min Payment $363
Student Loans: $24,533 Min Payment $95.81
Our thought process is to save at least $16.5k towards any down payment, extra fees etc that we may need for the phone and then to pay off/down the following debts:
1. Citi Bank
2. Pay $6316 to Amex = Balance left of $5000 = estimated payment of $150/mth
3. Pay $6819 to Target MasterCard = Balance left of $5000 = estimated payment of $162.5
4. Pay $4112 to Discover = Balance left of $14k = estimated payment of $270
Total Debt Payments = $951.50
My husbands income monthly is $4663.96 which $951.50/4663.96 = 20.401% DTI
If it were me, I would use that wonderful gift to pay off Target & Discover, and pay $10K to AmX, and SD those cards until after closing. Those cards are near maxed out and have humongous min pymts, which probably have high APRs too. Lenders love CCs with $0 balances and every CC DH possesses has a balance and very high UT.
Since DH is VA, no DP is needed and VA allows for Seller closing costs assistance up to 6% of sales price. However, if you need some extra cash from $40K, then at least think about paying those 3 card balances down to <8.9%.
Now we need some datapoints:
Any negatives on CRs
FICO misdle mortgage score
GOALS: Garden til APR 2020 and 800 Club
SEP 2019: EX 791, TU 797, EQ 800 JUN 2019: EX 788, TU 794, EQ 779 DEC 2018: EX 777, TU 783, EQ 799