In inevitability of some financial direction...credit card debt, mortgage?
A friend of mine and her husband are looking into getting a house next year when their rental lease ends (Jan 08). They plan on spending this year trying to get out of as much debt as possible. They enjoy about $14K of unsecured debt. Her credit score is inside the 650 range, his is way over 700.
They are surrounded by desperate need of some advice as to what they should do this year. They're both contributing to their company's 401K programs. Obviously, They involve to focus on paying off their debt, but at the same time, they also requirement to save up for the house.
Her question very soon is which should they focus on?
She have about $30K surrounded by inheritance money that she can get which they will use as the down payment. And that raise a whole different issue about who will own the house, etc (just within case of divorce).
Any advice as to where on earth they should navigate our finances this year will be very helpful. Thanks contained by advance!
Answers:
I'm a mortgage broker, I say the best thing to do is to use the 30 g's to wage off the debt. which will raise credit score, use the money left over for reserve and closing cost on your home loan. even with credit score 650 and above you will qualify for a Fannie Mae 100% loan at about 6.375% on a 30 year fixed rate.
Take a look at this information page http://www.youbigg.com/Credit-Cards.html it lists types of cards and information, it should also answer your interrogate.
Well its awesome they they are paying down debt and savign for a house in finance.
I recommend "The Total Money Makeover" by Dave Ramsey.
(www.daveramsey.com) as a great guide that will pretty well answer all the question.
Paying off the debt is job one. I would use the 30K for that. Stop the 401K until they enjoy the debt paid off and own a good sized emergency fund (3-6months) and then pick up for the house. Not buy anyhting that they can't afford to finance for 15years fixed.
And the 30K is "our" money, it will be "our" house. You shouldn;t plan for divorce when your married. Otherwise you shouldn;t buy a house together if your plannign for the divorce. :)
Pay off debt first. If they have the debt paid off they wouldn;t pocket out 14K in unsecured loans to put a down payment on a house...its virtually like peas in a pod thing.
If she has $30,000.00 USD for a down return then she can buy the house on her own.
It's not wise to buy a house beside a 650 credit score.
She has to put up for sale her car and perhaps other things to reward her debts and increase her credit score to at least 700 or she will rate too much interest for her house.
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They are surrounded by desperate need of some advice as to what they should do this year. They're both contributing to their company's 401K programs. Obviously, They involve to focus on paying off their debt, but at the same time, they also requirement to save up for the house.
Her question very soon is which should they focus on?
She have about $30K surrounded by inheritance money that she can get which they will use as the down payment. And that raise a whole different issue about who will own the house, etc (just within case of divorce).
Any advice as to where on earth they should navigate our finances this year will be very helpful. Thanks contained by advance!
Answers:
I'm a mortgage broker, I say the best thing to do is to use the 30 g's to wage off the debt. which will raise credit score, use the money left over for reserve and closing cost on your home loan. even with credit score 650 and above you will qualify for a Fannie Mae 100% loan at about 6.375% on a 30 year fixed rate.
Take a look at this information page http://www.youbigg.com/Credit-Cards.html it lists types of cards and information, it should also answer your interrogate.
Well its awesome they they are paying down debt and savign for a house in finance.
I recommend "The Total Money Makeover" by Dave Ramsey.
(www.daveramsey.com) as a great guide that will pretty well answer all the question.
Paying off the debt is job one. I would use the 30K for that. Stop the 401K until they enjoy the debt paid off and own a good sized emergency fund (3-6months) and then pick up for the house. Not buy anyhting that they can't afford to finance for 15years fixed.
And the 30K is "our" money, it will be "our" house. You shouldn;t plan for divorce when your married. Otherwise you shouldn;t buy a house together if your plannign for the divorce. :)
Pay off debt first. If they have the debt paid off they wouldn;t pocket out 14K in unsecured loans to put a down payment on a house...its virtually like peas in a pod thing.
If she has $30,000.00 USD for a down return then she can buy the house on her own.
It's not wise to buy a house beside a 650 credit score.
She has to put up for sale her car and perhaps other things to reward her debts and increase her credit score to at least 700 or she will rate too much interest for her house.
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