Buying a home with debt and a large down payment vs. Buying a home with no debt and less of a down payment.
Below are the reasons it is always better to use your savings to payoff your debt and put less money down than it is to purchase a home with debt and having a large down payment.
- Paying off your credit cards will increase your credit scores and enable a borrower to secure a lower rate
- Paying off your credit cards reduce the monthly debt obligation which will enable a borrower to qualify for a larger mortgage
- The higher the credit score the lower the amount the borrowers will have to pay for PMI, if needed on the loan
- The overall monthly payment will be lower paying off the debt and securing a larger mortgage
I recently discussed this topic on my radio show, Home Sweet Home Chicago on AM 720. To see the segment click on this link.
