1st Mortgage to Pay for a new house....2nd mortgage to pay for Credit Cards....Good Idea?

I want to buy a house and have a good Fico Score. However 75%of my income is spent on Rent, Car, Credit Cards and Student loans.

I wanted to know can I buy a house and possibly get a 2nd mortgage to payoff my credit cards, car and student loan?

1st Mortgage to Pay for a new house....2nd mortgage to pay for Credit Cards....Good Idea?

Yes you can do this and you have more than one option:

1.No Doc Loans- You can qualify even with your high debt load. There are programs available with no income requirements. These are reffered to as No Ratio or No Doc loans.

This option is the reason why there are so many foreclosures recently. Unfortunately, a lot of people got into homes that they couldn%26#039;t afford. If you can live on less, and you have discipline, then this may be an option. If you don%26#039;t, then I would avoid this strategy.

2. 125% Financing- You could also try qualifying for 107-125% financing. This would give you extra cash to qualify to pay off your debts, as well as buy your home.

The catch to these loans is that you will be %26quot;upside down%26quot; on your property. Which means that you will have to wait until property values are high enough to cover your loan amounts before you can sell or refinance.

3. Below Market Homes- You can find a house that you can buy for less than the market value of the home. This is becoming more common now that prices are softening.

You have to be careful though, because some properties may seem undervalued when they are really just depreciating. The way to be safe is to not consider anything a %26quot;deal%26quot; unless it is 75% or less than the market. For example, a $100,000 home that you can buy for $95,000 isn%26#039;t a deal. A $100,000 home for $75,000, on the other hand, is.

You can then refinance the home that you bought and get a second mortgage to pay off your debt.

This is the best way to go but it takes a lot of work to find %26quot;deals%26quot;. The best place is to start with foreclosures. I can go on for hours about foreclosures but that%26#039;s not what you asked about...

If you or anyone you know needs more help with any of these topics then please email me with your contact information and I will give you a call back the same day.

1st Mortgage to Pay for a new house....2nd mortgage to pay for Credit Cards....Good Idea?

Not really.

I%26#039;m making the assumption that, since you have all that credit card debt, and most of your income is going to pay these monthly bills, that you have no savings.

If you put zero down payment on a home, you%26#039;ll have zero equity to borrow to pay off those cards. If the housing market turns around and starts appreciating, maybe in 2-3 years you%26#039;d have enough equity. But by then, you%26#039;ll have lost the home.

Time to start a serious budget diet.

1st Mortgage to Pay for a new house....2nd mortgage to pay for Credit Cards....Good Idea?

If you find a really good deal on a house, yes you can. However, most times a 2nd mortgage will be around 80% of the equity in your home. So if you buy a house for $200000, and it is appraised at $240000, you have $40000 in equity. A bank will loan you around $32000 at the most. Stay with reputible banks and you should be fine. But it should like you want to pay off an awful lot of bills. Student loans, car, credit cards. Lenders will also look at you debt to income ratio before making a home loan as well.

Good luck

1st Mortgage to Pay for a new house....2nd mortgage to pay for Credit Cards....Good Idea?

Yes: You can do that, better still Apply for your mortgage on day one for enough money to buy the house, pay the credit cards and student loan. You may carry a large mortgage, but the absence of car note, credit bills, make it do-able.

The up front advantage is the interest you pay annually can be deducted from your taxable income. If You give 50% of your tax return to your mortgage holder every year, your 30 year mortgage may drop by 10 years.

1st Mortgage to Pay for a new house....2nd mortgage to pay for Credit Cards....Good Idea?

Credit Cards are unsecured debt. A home mortgage is secured by the property. If you fail to pay on a mortgage the bank will foreclose. If you fail to pay on a credit card they will just ruin your credit but cannot foreclose on your home.

Probably not the best idea. You would be better off refinancing your debt into a low interest card.

1st Mortgage to Pay for a new house....2nd mortgage to pay for Credit Cards....Good Idea?

you spend 75% of your money on current debts?

ok, so, a lender is going to take that into account, and they look at how much you are going to pay with your mortgage. do...your debt is going to be over 100% of your income......sorry, you can%26#039;t do it.

they don%26#039;t care that you %26quot;plan to use some of that money to pay off current debts%26quot;.......it%26#039;s all done and calculated prior to closing yout mortgage loan.