Which debt is worse when getting a mortgage? Credit card or student loan?

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  • Which debt is worse when getting a mortgage? Credit card or student loan?


Answer #1 | 23/12 2013 06:28
credit card more damaging,,,by far don't forget you need a down payment for a home these days.
Answer #2 | 23/12 2013 08:22
Credit card debts are worse. Student loans aren't repayable until you earn over a certain amount. So provided your house is within your budget I doubt student loans would even figure in the decision. Credit card loans are far worse because they're a LOT higher interest. They're also worse because they suggest or imply irresponsible spending. I cant afford this now, but I'll buy it anyway. If you don't pay them off each month you can easily run up huge debts. Debts that, because of the higher interest, may make you give them priority over the mortgage repayments.
Answer #3 | 23/12 2013 06:47
Credit card debt is worse
Answer #4 | 23/12 2013 11:47
Credit card. Interest rates are far higher.
Answer #5 | 23/12 2013 12:00
Student loans are probably the least important loan when talking about getting a mortgage. They're long terms, low payments, relatively low interest, and tax free interest. 1. Ensure you have an emergency fund ($1000).. there are many "hidden" costs of owning a home.. the furnace or water heater, etc, could die at any moment.. you don't want to need credit to pay for it 2. Pay off your credit cards, highest interest first 3. Continue saving for a down payment 4. After you have the mortgage (and CCs are paid off), continue building the emergency fund to 6 months expenses (it will take a while, but set up auto payments to a separate savings account)
Answer #6 | 25/12 2013 18:40
Great question! It all depends on the monthly payment of each item (student loan and credit card), as your lender will look at something called Debt to Income Ratio or (DTI). It is where you take your monthly income (divided by) mortgage payment proposed and existing monthly payments. So, my idea is, if your student loans are in deferment for at least 1 year from when you apply for a loan, then going the FHA mortgage route will allow you to completely OMIT that student loan from your debt to income! However, if you go Conventional Mortgage, they will need to account for the payment. My advice from a personal perspective is that if you are planning on going FHA to buy the home (meaning low 3.5% down payment instead of 5-20% down Conventional), then pay down that dirty credit card, which should hopefully allow you more room on your debt to income to qualify for a much bigger and better home. Good Luck!
Answer #7 | 23/12 2013 12:18
still in school? do you have a job? do you have the down payment? your score may be good but without a job, without a down payment forget any mortgage

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