Debt Pay Off
Hello Terry,
I am in need of some guidance for our unique financial situation. We are looking to move as our starter home has been out grown and we need more space. We are looking to move late spring/early summer.
A little background….I am a recovering gambling addict (941 days since) and I maxed out credit cards to use to gamble with and used our joint cards to pay bills. I thankfully never missed a payment and maintained a somewhat reasonable credit score that was correctible with just paying down the balances. In order to do this we took out a home equity loan and started a debt repayment program with Take Charge America. We paid off the home equity loan and have about 25% to pay off from TCA. Because of all of this both of credit scores are in the high 700’s and qualify for a really good rate.
If we pay off the rest of the TCA loan it would impact the amount we will have to put down for our next downpayment without really relying on the sale of our current house. But if we pay off the TCA loan we will have officially wiped away all the debt I put us in with my addiction in about 2.5 years which also means we have zero credit card debt.
Downpayment vs. Zero Debt?
Thank you in advance!
Terry Says
First, congratulations. I’m happy to publish this to prove to others that it can be done — and you have done it — successfully gotten out of debt and conquered an addiction. That’s inspiring.
OK, the first step is to go to a lender and get qualified for your next mortgage. They will know that in order to buy another house, using the proceeds of your current home, you will have to pay off that TCA loan. And yes, that will impact not only your down payment but the size of the mortgage they will give you.
It’s not either/or. Hoping you can pay off the loan balance before you go house shopping and fall in love with a larger home. A little extra work, part time job, etc and maybe you can get that done. No rush, as mortgage rates are coming down.
