{ "media_type": "text", "post_content": "Is it possible to buy a house with good interest rates if my credit card utilization is high (65%) but my debt to income ratio is good (30%)? First time home buyer", "post_id": "61d6092110228b002e879e54", "reply_count": 21, "vote_count": 1, "bowl_id": "552d1d24dc1c586b09d2d051", "bowl_name": "Consulting", "feed_type": "crowd" }

Is it possible to buy a house with good interest rates if my credit card utilization is high (65%) but my debt to income ratio is good (30%)? First time home buyer

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Honest question: if you only have 3% down and are carrying a lot of credit card debt, why are you buying a house in the hottest housing market since 2006?

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You need to have an emergency fund when you own a house. Having an emergency fund while you’re carrying credit card debt probably doesn’t make sense. Therefore, it seems like it would make more sense to pay down your credit card debt while continuing to rent for a while rather than taking on more debt with a house. I suspect you’re thinking that you don’t want to keep renting because it’s “throwing away money”. What you’re paying for, when you pay rent, is to let all the stuff that you’d otherwise need an emergency fund for be someone else’s problem. A/C goes out? If you own the house, that’s a 5-10k repair. As a renter you call the landlord. There’s value in not getting trapped in a house you’re too cash-poor to really afford. That’s what you buy when you’re paying rent.

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Depends on down-payment amount mostly. Can you put 20% down? If so, some creditors won't mind as much as long as your home loan debt to income stays lower than 45%-ish

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Thank you so much !

Are you paying your CC off every month? If not I would take care of that first.

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This is why we need to teach personal finance management in school / college

Is that 30% debt to income all credit card debt or are you including a car loan? 30% debt on a credit card is a lot and suggests you are overspending your means. If that’s a car loan or student loan, then fine. Have you checked your credit score?

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Ok. That makes sense. Have you checked your credit score? Some credit cards give you access to your score. If you are over 780 your credit shouldn’t hold you back.

Thank you !!

Your credit card utilization is a factor in your credit score, which will impact your interest rate. Credit card utilization directly won’t impact your interest rate. You may consider asking for an increase in your credit card limit assuming they can do so *without* a hard credit check. Many times you can get an increase just asking and that would reduce your utilization ratio. Also, many banks share your credit score and the factors that are impacting it. I have an account at Bank of America and they post it monthly. There are a ton of factors that impact credit score that you may not even be aware of.

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Yeah you're right. It cuts after two lines instead of expanding.

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