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| *Loan,banking and credit>>>tax refund |
Save tax refund for a home, or pay down credit cards? |
Here's the situation. I have 2 credit cards with pretty large balances. Neither is maxed out, but the balances are high. I've never missed or been late on a payment for either. But I want to save for a house. I know that paying down the balances would boost my credit score, which I need. But I'm afraid to use the money on the cards and not have enough of a downpayment for a home in 2009. I've been going over this question for weeks. I don't know which to do. I'm fully aware of the benefits of both, it's choosing a course of action that is boggling me. Pay down the credit cards, it improves your credit to debt ratio, and makes a home more affordable, or more home affordable, and increases the percentage of how much you can get for the home loan. Pay the credit cards.....get rid of those snakes as soon as possible. You will be amazed how much money you "instantly" have in your pocket when you are no longer required to send it to them. Then you will have enough for a downpayment. Realtor Pay down the credit cards & put the payment that you would be paying the credit cards right into saving. You will soon have more than the tax refund, & no bills to pay out of it. Absolutely pay down/off the credit cards. Think of your choice this way. If you retain the money for a down payment and keep the credit card balances ... haven't you in essence borrowed the downpayment on a credit card. Credit cards should be used as a convenience ... not as a financing tool. Pay all current charges every month and never carry a balance. Pay down the cards. Don't even think of a house until you're cards are payed off. I hate to burst your bubble but if you have high balances on your cards that you are unable to pay off monthly then you are not finacially ready to buy a home. First pay off credit cards and start paying them off in full monthly. Start saving $1000 or so each month for a year and see if you can do it. That will be a test for you to see if you can afford to pay for your daily expenses and house expenses for a year. That 1k you will be putting away in a money market account will be beneficial even if you are not going to end up with a house. Trust me as it stands right now you should not get a house! Good luck |
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