No credit card required
Browse credit cards from a variety of issuers to see if there's a better card for you.
You really haven't given us enough information or background to really advise you. A FA would want your income, debts and a budget. I have to second the advice above. Your student loans are a problem. You admit that seven years later you now owe more than you borrowed. You're "not getting any younger" and it appears they are not getting smaller. I would strongly encourage you to entirely pay off those loans or make a substantial (much, much more than $5k) payment on them. Given that this is a sudden windfall that will not be repeated you are better off using it to get out of debt rather than leveraging it to go into more debt with a mortgage. Paying those loans off is likely to significantly help you score and improve your chances of getting a home loan with the lowest possible APR. That can save you tens of thousands dollars in interest over the life of your home loan. Should you run into financial troubles again in the future you may be able to refinance or sell your home and come out ahead. The loans however could trigger a casade of defaults that takes your home and the downpayment with them. Pay them off while you can.
@Anonymous wrote:
Hi all.
I’m going to be getting a settlement from a car accident and really need some advice.
I’m getting around $23,000 and I really want to buy a house. I’m planning on using some of it for a down payment but I’m torn between using some of it to pay down my student loans. I have about $18,000 owed in student loans and they are about 7 years old. I had financial trouble in the past and I had to do a forbearance. I’m currently paying them down monthly but I now owe more than I borrowed. This is probably going to be an issue when I want to get my mortgage loan. So the question is, do I use some of the money to pay off maybe $5000 towards them? Is that amount too much or not enough? I can’t really afford a financial advisor so I’m hoping to get some good suggestions from this forum. I should also say that I have more than $10,000 in a Roth IRA that I could use towards the down payment but I’d like to not have to use it if I don’t have to as that’s all I have towards my retirement. I also have no collections on my report. The student loans and a car loan are my only big debt at the moment.
Thanks in advance for the replies
My advice is to pay off your loans, and postpone your plan to buy a house.
You know what @Anonymous, since your heart is set on buying a home, that is exactly what you should do. So here are some steps going forward to make a decision having all the facts:
1. Discuss with your banker your interest in buying a house. He will tell you your DTI based on student loan and whether it is doable with your income and other CC/loan payments .
2. Take his answer to heart. If he says the student loan needs to be paid off in order to buy a house, then that’s the realistic thing to do. If he gives you a lesser amount to pay down student loan, then you have all the information needed to make a decision.
3. Also, talking with a lender will give you an idea of how much home you can afford to buy, the down payment required, and an estimate of closing costs.
Are you a member or have a military-affiliated family member that belong to NFCU? If yes, they offer 0% down mortgage loans.
I understand wanting to buy a home when a huge portion of your paycheck is going toward rent and taxes with no write-off. But with the new tax law, the deductions claimed are much higher for 2018 than previous years.
Homeownership is the American dream and I understand that even if there are some pitfalls. I don’t regret one moment of being a homeowner.
Once you have all the facts in hand, you’ll be able to make the decision that works best for you.
GL2U