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.

  1. Paying off your credit cards will increase your credit scores and enable a borrower to secure a lower rate
  2. Paying off your credit cards reduce the monthly debt obligation which will enable a borrower to qualify for a larger mortgage
  3. The higher the credit score the lower the amount the borrowers will have to pay for PMI, if needed on the loan
  4. 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.