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limitless__ t1_jdt0xyx wrote

With a credit score of 655 you're not likely to get a good rate on any loan. Your best strategy is the aggressively pay off the credit card debt and personal loan ASAP. Your auto loan depends on the interest rate. That will do way more for your credit than taking out even more loans.

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CommunityKarma23 t1_jdtiub7 wrote

If you’re seeing 655 scores on credit karma your mortgage score are most likely anywhere from 40-60 points lower.

The bureaus use a different scoring model for consumer scores (what credit karma is showing) vs mortgage scores.

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Vacillating_Fanatic t1_jdtqwyf wrote

Fwiw, my score was significantly lower on credit karma than what the mortgage lenders showed. I've checked independently since then, and the credit karma score has consistently been much lower than my actual score (as in around 50-100 points off).

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SleepyHobo t1_jdtvnr3 wrote

Found this to be the same when applying for car loans and credit cards as well. Not 100 points but 30-60 points.

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Virgil_hawkinsS t1_jdu9zqt wrote

Same boat. I was shocked when I got my first big boy chase card a few years ago and my score was almost 100 points more than credit karma.

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kubatyszko t1_jdtvv6n wrote

Needs at least 730 for the best rates

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gnerfed t1_jdu0rbv wrote

It certianly isn't 730. Been a while since i was in mortgage processing but it was eithe 720 or 740.

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2ears1mth t1_jdun6kw wrote

Anything 740 and above is considered top tier credit. You can easy get a good “rate” with a lower score though and with FHA anything 640 and above will get you the same pricing. There are no adjustments on pricing with FHA if your score is 640 or above.

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whitney_k t1_jduwg8j wrote

Best rates are usually 740 or even 769, but going FHA, a borrower at 640 can do okay. A lender is where they need to begin this journey.

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sjb-2812 t1_jdujazm wrote

>With a credit score of 655 you're not likely to get a good rate on any loan

Perhaps a bit OTT when the total is out of 710?

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Coolyajets t1_jdt10ih wrote

Why continue to use credit cards with the evidence so clearly indicating that you struggle to manage your debt?

For most, the biggest barrier to home ownership is the down payment. How are you going to save for a down payment if it is going to take you +6 months to pay off $7k?

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[deleted] OP t1_jdt1s67 wrote

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asatrocker t1_jdt5i44 wrote

Is your investment account earning more than the interest rate on your debt? If not, you should liquidate and pay off your debt. You’re losing money otherwise

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[deleted] OP t1_jdt5mdo wrote

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Eatsnocheese t1_jdt6bn5 wrote

Wait. I want to make sure I understand. Your investment account is earning more than 26%?

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[deleted] OP t1_jdt7xtr wrote

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Coolyajets t1_jdt8xnc wrote

Wtf are you invested in? Nothing gains like that unless it is ridiculously risky. If it's risky, you do not want to invest money that you will need in a year in it.

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Quiet-Road-1057 t1_jdtcype wrote

There’s literally no possible way. The best performing fund last year went up 6% and the top performing fund on a 3 year average went up 16% on average.

Liquidate your investments, pay your credit card debt.

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Skeptical-_- t1_jdu9mkb wrote

That’s easily possible if they bought a few specific stocks. Not that’s necessarily a good idea but very possible it happened.

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Quiet-Road-1057 t1_jdv4ujr wrote

You’re absolutely right, but in this event OP is 1) not investing, he’s gambling and 2) he’s on a massive stroke of good luck that OP should not be expecting to continue.

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marvinvp t1_jdtl8k9 wrote

I'll just add to the chorus: you should sell all your investments and pay off your CC debt. Don't fool yourself thinking that you can sustain 26% post-tax returns, not even Wall Street pros can claim that. Maybe you were able to double your money over the past 3 years with some risky bets, but you likely won't keep it up. It's like going to a casino and betting on black, winning, and then thinking that you should just keep doing it.

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idkAboutYouMan t1_jdt86cg wrote

No way any investment is averaging 26% post tax gains. Use you’re investment account to pay off your debt.

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[deleted] OP t1_jdta8nu wrote

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idkAboutYouMan t1_jdtb25w wrote

So you’re basically gambling half your savings while holding serious debt? You could lose it all in one day. Pay off your debt dude. You will lose eventually

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KinlawFanAccount t1_jdtaut3 wrote

Options are gambling. You will lose your money and be out of your “house” money. By all means if you think your 25%+ returns are sustainable, continue down this path. But that’s not realistic. You’d be better off selling those and paying off the CC debt. If 25% gains were realistic, everyone would be doing what you’re doing.

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[deleted] OP t1_jdtbp6b wrote

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SainTheGoo t1_jdtc6t4 wrote

Thinking like that is how you get into debt like you have. You're getting good advice and it's frustrating that you're ignoring it. What you are doing is not working, that's why you're coming to the internet for help.

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[deleted] OP t1_jdtd2gc wrote

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thowawayhorn t1_jdtdwvf wrote

Yeah, and we’re telling you it’s a dumb idea and that you should pay off your high interest rate debt with your current savings. It’s not investment advice. You’re straight up ignoring good advice and only want to hear what you want to hear.

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djstudyhard t1_jdtz8fn wrote

If you’re so confident in your skills in investing then use all that money, pay off your debt, then reinvest in a few months again. If it was so easy and you are so wise that should be no problem for you. You’ll be a billionaire in 5 years tops. If that seems like a tough pill to swallow then you’ve got your answer (time to liquidate while you’re ahead).

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[deleted] OP t1_jdu0744 wrote

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djstudyhard t1_jdu855l wrote

We aren’t mad. This is just not that uncommon of a situation. Someone is in a not great financial situation and found a streak of good luck and thinks they are on the path to success because their last few moves were good. Hoping for the best for your investment and I hope that it turns out the best for you!

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_BreakingGood_ t1_jdu89s8 wrote

Just take a bit of time to think about why literally everybody is saying it's a worse idea to hold your investment than pay off your debt.

Just spend some time thinking why everybody is telling you that.

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[deleted] OP t1_jdu8raa wrote

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elysiansmiles t1_jdup7op wrote

Wait so you have literally no emergency fund aside from money in a risky investment? That’s even worse. Take that money out. Put a reasonable amount in a real emergency fund. Then use the rest to pay down your credit card debt.

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_BreakingGood_ t1_jdv76lh wrote

That just makes it even worse. To have your entire emergency fund sitting in some investment.

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KinlawFanAccount t1_jdtbwnk wrote

Got it. I would still recommend selling anyways, Credit Card debt is basically as bad as it gets, interest rate wise.

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continue_improve t1_jdtdhqu wrote

You don’t need another loan. Stop buying things you don’t need and just throw your extra income at your debts. You have less than 15k of debt. I don’t know what your new income is but if it is as good as you say you should be able to get rid this whole debt is less than a year.

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Impressive-Sympathy4 t1_jdt454f wrote

Never get a personal load to pay off credit cards. You will more than likely rack the credit cards back up and have a personal loan. Just pay off what you have now and save money.

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TofuliciouslyGood t1_jdtre4p wrote

I disagree with this. A personal loan usually has a lower interest rate than credit cards and the payments are over a fixed time frame, so the interest isn't as penalizing. OP already has stated the intent to pay off the loan early and credit card charges in entirety monthly. This sounds like a reasonable plan to save some interest.

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[deleted] OP t1_jdt51ce wrote

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Impressive-Sympathy4 t1_jdt84wp wrote

Go look for some zero-interest balance transfer credit cards. Transfer and pay it off interest free. Usually Discover and Capital One have them

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Cardboardcubbie t1_jdtlbkh wrote

What is the interest in this personal loan because with your credit score and current market conditions I don’t see how you’re going to qualify for anything better. Better than a credit card, maybe.

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clearwaterrev t1_jdt69be wrote

Refinancing high interest debt into a lower interest rate personal loan should save you some money. I would worry less about the potential impact to your credit scores, and instead just focus on paying off your high interest debt and then saving up cash.

> when we go to purchase our first home (hopefully) next year.

Your timeline for buying may not be realistic if you have no savings at all right now. Make sure you are saving up enough cash for your down payment, an additional 3-4% for closing costs, and then a 3-6 month emergency fund on top of that. If you are aiming to buy a $200k home with a 5% down payment, just as an example, you'll need something like $26k in cash before buying.

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[deleted] OP t1_jdt7ut1 wrote

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Realistic-Produce-28 t1_jdt9iei wrote

Honestly, you should use what you have in savings to pay off the personal loan and credit card, then use what you would have paid towards those and pay off the car loan. Then replenish savings with the intention to be debt-free when you go to buy the house. Provided it’s the kind of savings you can take from without penalty.

At minimum, stop using credit cards.

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clearwaterrev t1_jdta0p7 wrote

If you have savings in an investment account, I would just pay off all of your high interest debt now.

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AlittleOnTheNose1 t1_jdtiz8o wrote

None of this is a good idea. Pay off all your debt. Get an emergency fund of six months or so. Get some sort of down payment and get your credit score for both of you up to 720 ish or higher. And then you’ll be ready

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Peanuteatspoop t1_jdtxg9c wrote

OP, you are only a few years into investment and options while the collective of us here have seen it for the last few decades. Most people who post here because they want to improve their situation. I've seen a lot of good advice already. You can take our advice or not, but just know that being humble and aware of the limitation of your own knowledge are the foundation of improvement.

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[deleted] OP t1_jdu14tp wrote

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ElectroZX t1_jdu7zth wrote

You shouldn't try to time the market. What if it all goes against your plans? You're not investing, you're gambling your money away.

Let's say you're making some gains on your "investments". Is it really netting you money against your outrageous interest rates on your debt?

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[deleted] OP t1_jdu9gg6 wrote

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simply_ira t1_jdughsk wrote

OP, stop looking at this as different pots of money. If you have such huge debts, you don’t have ANY life savings. They cancel each other out.

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[deleted] OP t1_jdugmob wrote

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simply_ira t1_jdugsvk wrote

If something happens, you use the credit cards - which means you use them and pay that interest when you absolutely have to, instead you will be paying said CC interest regardless at the moment. You will not be worse off than you are right now.

Edit: but longer term, build up an emergency fund. That comes AFTER clearing high interest debt which you are buried under. In the absolutely starting point you find yourself in, emergency = back into debt, but that’s why everyone is telling you to reevaluate your situation.

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[deleted] OP t1_jduhksx wrote

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simply_ira t1_jduiasy wrote

I am including your personal loans and cc when I said “high interest debt”. I know one of them is at a lower 9%. Not the low interest you get on a mortgage so should still be cleared - last - but cleared. Buried = negative net worth. OP, it sounds like you are paying the debts off and heading in the right direction. You asked for advice on how best approach it, you got it, you are free to ignore said advice. It’s free advice and we are not professionals :) perhaps just people further ahead in the financial journey than you.

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Effective_Inside2962 t1_jdt73a9 wrote

I'm not sure if all banks look for this, but mine wanted to see that I was working in the same field for at least 2 years prior to purchasing. Just food for thought since you said you just got a higher paying job.

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Phyduex2000 t1_jdt7mfz wrote

Just a promotion at the job I have been with for 8+ years. I am a General Manager at a restaurant making 68k base.

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LonelyDraw5778 t1_jdtabnp wrote

Congrats on the promotion; forget about another loan with your current score and put all the extra money into the personal loan, then the credit card, then the car.

Once you are out of debt put all that money you were spending to pay it off into short term savings and use that for the house when it is time.

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Phyduex2000 t1_jdtarkq wrote

That was what we were initally planning on doing I just wasnt sure if doing it this way would be better. Appreciate it!

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firefly20200 t1_jdtc7ge wrote

Your take home is what, at least $3k/month.

Can you pay $1,000 a month right now towards debt if you eat rice and ramen for a few months? (IE cut bills way down).

If so get that 26% loan paid off in three or four months. Then go after the credit card hard core. The car... eh, it's a bad time for loans right now. You'll probably look at 8%+ even with good credit for an unsecured personal loan and that doesn't really save much on the car. Maybe check local credit unions on refinancing the car rate, but used auto rates probably aren't much better, maybe 6 or 7% if you get lucky.

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Phyduex2000 t1_jdtdf5j wrote

Take home for me is $4,120 and for the wife is 2-3k (she is a server) we are putting an extra 1200 or so each month toward the debt.

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Effective_Inside2962 t1_jdtdgqb wrote

Nice! Congrats! Banks look at monthly minimum payment on debt you are paying on when it comes to figuring out your loan amount. The lower your minimum payments are, the more mortgage you can afford in their eyes. I would suggest going the route that will save interest and lower your total minimum monthly payout. Also, ask about the possibility of paying points to help lower your rate when you look into securing a loan.

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nriojas t1_jdtqtpe wrote

If you need to pull out a personal loan in order to pay your credit card debt and other debts, you are no where near ready to buy a house. Especially with a credit score that low.

You’ve gotten some sound advice here but seems you think you know better. Good luck.

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[deleted] OP t1_jdu28v7 wrote

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autismspeaksdotcom t1_jdub21p wrote

Let me get this straight.

You’re asking for financial advice in a subreddit dedicated to personal finance. They give you well-thought out, actually useful advice, some of which you don’t happen to like. And then you say that they have their parties in a bunch?

Nah mate. You made poor financial decisions. The truth hurts, and now is your opportunity to take the advice, and make smarter choices.

Do you really think your exit strategy is going to work? You’ve spent a lot of time and research into it…. Like you did for a 9.4% interest car loan?

Welcome to the circus buddy we’ve been looking for a clown.

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[deleted] OP t1_jdudcry wrote

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autismspeaksdotcom t1_jdueh34 wrote

Im sorry, I might’ve been a bit harsh.

—

You’re right, having emergency savings is very important.

On another note, it can be risky to have all of your emergency savings in stocks.

In the same way how one can lose their job in a recession, your (savings) investments can shrink or even cease to exist. That’s double trouble. Triple if you count the debts too.

Then you still have debt, less savings and reduced/no income. The debt will not wait for the recession to be over; month by month, it piles back on. Snowballing if you will.

If you pay off your debts, you can guarantee that you’re no longer losing more money to interest. Each month, the money you would’ve paid towards your loan & interest, can go to savings. You can’t guarantee that you’ll make money in investments.

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[deleted] OP t1_jduf00n wrote

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Potential_Lock6945 t1_jdunxyf wrote

By you not paying off your credit card debt today and keeping $7000 in a savings account, you’re basically paying 26% apr (or whatever your credit card apr) for that. You should take $6,000 out and apply it to your credit card today and keep $1,000 in you’re emergency fund then start rebuilding your emergency fund.

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MsDisney76 t1_jdtvd2e wrote

Don’t get another personal loan, just aggressively pay off your debt, and stop ALL unnecessary spending. A personal loan won’t help your credit score, just lower the length of your credit history which is a negative. Pay off the personal loan, then the credit cards, always pay in full each month, and then start saving like crazy. No shopping, no meals out, and play board games with friends.

Someone mentioned you may need to wait longer to buy your house. You will need a very healthy reserve when you buy a house or you will soon be in more credit card debt than you are now because even newer homes are expensive. Lately, insurance goes up each year, taxes increase each year, only the mortgage part stays the same; and repairs and maintenance are never ending.

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AstariaEriol t1_jdu42ml wrote

Can confirm. Just bought my first home. Already spending thousands of dollars to fix urgent issues I didn’t know about until after closing. Luckily I budgeted for a lot of unforeseen expenses.

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simplyhouston t1_jdujc8p wrote

>A personal loan won’t help your credit score, just lower the length of your credit history which is a negative.

This is the big issue. You will hurt your chances of a mortgage approval in general. An underwriter will most likely look at it and see you trying to borrow a lot in a little time and think you are high risk. I work with first time buyers quite a bit.

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WeekdayAdventurer t1_jdtdknu wrote

Agreed with others here that your best move is to get the credit card and personal loan debt paid off as soon as possible without taking out an additional loan.

I see you mentioned 9k in investments. Regardless of past performance, I would absolutely recommend liquidating your positions and putting that immediately towards your existing debts.

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roarlikealady t1_jdt101w wrote

What are the interest rates on your debts? How much extra per month could you throw at this debt?

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[deleted] OP t1_jdt1exo wrote

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roarlikealady t1_jdt2ynu wrote

Got it.

Can you list out the debts along with interest rates, from highest interest to lowest interest?

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[deleted] OP t1_jdt4cfj wrote

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an_untaken__username t1_jdt6ufx wrote

Jesus Christ. Stop. If you’re personal loan is 26% now please do not take out another one right now unless they offer the consolidation loan at like 7%. You’d be better off opening a new credit card with 0% XX months balance transfer promo.

I have perfect credit and no debt and I can’t buy a house right now. Realistically you’re probably 5 years out from getting to a point that makes sense. Pay the personal loan off. Pay the credit card off, and then pay the car off. After that start saving for a down payment. Over time your credit score will increase just from having the credit card open. You don’t have to use it.

Reevaluate purchasing after you a 5-10% down payment.

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roarlikealady t1_jdtf2je wrote

Holy heck. You need that personal loan and credit card balance gone. Like, now.

Rice and beans, cut every subscription, find things to sell. You need to act like your hair is on fire, cuz it is.

Edit: and that car loan is atrocious too. Yikes.

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jschligs t1_jdttepz wrote

He has $9k from options he doesn’t want to sell…that would immediately remove his two highest interest debts. Asks for advice, ignores it.

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[deleted] OP t1_jdu2uvj wrote

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deschloro t1_jdu8m5b wrote

You clearly have no clue what you’re doing when it comes to finances.

I sincerely hope you don’t have any emergencies come up while you’re waiting to cash in on this “investment opportunity”.

You’re very far away from being able to purchase a home given the information you’ve shared. You needed that debt gone last year.

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[deleted] OP t1_jdu94pt wrote

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deschloro t1_jdu9gjz wrote

Instead of gradually paying off high interest loans immediately you’re going to pay more by paying them off slowly with interest.

You’re literally just throwing money away by holding on to those loans when you do have the money to pay them off.

Sounds like your pride and ego is preventing you from pulling that trigger, but you do you.

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four_leaf_clover_ t1_jduj2te wrote

Your money in your investment account shouldn’t be considered both your “emergency savings” AND “potential down payment for a house” AND “an inbestment” Yes, it can be liquidated but 9k in investment won’t be 9k when you liquidate it.

I am curious to know how much you make

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[deleted] OP t1_jduk2v0 wrote

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four_leaf_clover_ t1_jduotje wrote

I make about 70k without overtime or bonus. I have a good amount set aside for emergencies, 20% down set aside to buy a house within a year, 2 retirement accounts and 60k in investment account.

That 60k is just gonna be there doing it’s main purpose and not be an emergency fund.

You need to delete all the posts you put on multiple subs and ask more appropriate questions of “i make this much a year with this much debt and this much spending a month. How should i divide up my monthly income to quickly pay off debt a, b and c while saving money for downpayment”

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No_Expression_411 t1_jdudf4x wrote

What if we’re right? We’re not trying to drag you down into the mud. There’s advice so time-tested that it has become ubiquitous in this community and you should consider that it might be valid.

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Cypher1388 t1_jdthpou wrote

At least sell some of the investment savings to pay off the personal loan... Jesus this is scary.

How the hell do you have an almost 10% car loan?!

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Coolyajets t1_jdt92u9 wrote

Bro you need to pay that shit off with the money in your "investment account." That's atrocious.

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LVucci t1_jdtvzj7 wrote

I’m sorry, but you should not be in the market for a house right now unless it’s a true necessity.

Pay of that debt first.

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acciograpes t1_jdtzlo3 wrote

You guys need a strict ass budget. You’re drowning in debt. You can’t afford to eat out or order food for a few months. You need to shop for cheaper car insurance and drive less and cut out all unnecessary spending and live like months for a bit. Your credit card debt and personal loan are killing you. You cannot afford a house for awhile. Congrats on the new jobs but time for a budget.

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Throwawy22480 t1_jdtzptz wrote

You clearly came on here to hear everyone tell you one single answer which is, “yes”. But the obvious, blatant answer is no. But you’re probably going to go ahead and do it anyway because it seems your mind has already been set.

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TwoWrongsAreSoRight t1_jdtn17o wrote

The answer is no. Plain and simple. Let me explain. Credit Karma uses the Vantage scoring model whereas most lenders use one (or more) of the FICO models. They also only get data from 2 of the 3 credit trackers (experian and transunion). Credit Karma is great for gauging progress if you're trying to build credit but it means nothing to lenders. Your score in reality is likely 30-40 points lower in all major scoring models. In addition, different lenders use different FICO scoring models (FICO 8 vs 9 (some even use as early as 5), then there's auto, mortgage, etc). This makes it even more complicated for someone with a poor score to navigate. The bottom line is with a 655 Vantage Score, if you can get approved for a personal loan at all, your rate will be north of 30%.

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Annual_Fishing_9883 t1_jdtvgpj wrote

I noticed the complete opposite. Credit karma had me at a 780 but when I bought a few new cars in the last year, when they ran my credit, it consistently came back with over 800. One was even 828 when karma was reporting 770.

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TwoWrongsAreSoRight t1_jdtw2ss wrote

Yeah, I've ran into that with auto lending as well when I purchased my last car. However, that's one of the only things I've ever seen that with. Another thing to consider is that sometimes car loans only use one credit tracker so your score will be based on the data they have. I don't know the reason for this other than possibly cars are easy to repo and resell at auction.

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Annual_Fishing_9883 t1_jdtwl1y wrote

Well since cars are the only things I tend to borrow for, I’m ok with it then..lol I believe they pulled trans union for my last loan that was a month ago. Karma had me at 780. Their sheet showed 815..I’ll take it! Lol

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chadbyron t1_jdu89j2 wrote

Same, always been the opposite for me. 20-40 points highers when I get the copy of a credit app

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firefly20200 t1_jdtbq03 wrote

How much is "making more money than we ever thought possible" ?

Likely the car loan will be near or lower interest rate than the personal loan. I would think with that score your personal loan would be 10% to 16%. If you factor the car out of it right now, then you have $6,100 in debt.

How much can you pay? Can you pay $1,000 a month now based on your income? If so you would have that paid off in like six months.

Just pay down the cards fast and then go after the car payment. Paying off the cards will likely greatly improve the credit score and then you could revisit the loan to pay off the auto loan, but again, even with great credit scores the personal loans seem to be like 8-9% or higher right now and there might not be much savings compared to the auto loan rate.

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[deleted] OP t1_jdtcefa wrote

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firefly20200 t1_jdtd1et wrote

Focus on a budget instead. With $100k (pre tax) income, you should be able to knock these down fast with a tight budget. It might suck for a few months, but you can do this without taking a loan. Time is what kills, if it took you a couple years to pay it off, then yes, saving even 5% interest might add up, but if we're taking a year or less and on those amounts, the savings is probably in the hundred of dollars at most, if you're serious and pay it off fast.

Trust me, it'll feel good even if it's a hard few months. Make an aim that you guys hunker down from now until maybe end of July on just being really focused. Cut some streaming plans, cut the eating out, ditch a gym membership or whatever if you can and just go for runs outside etc. This is doable based on your income and willpower.

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Reasonable_Owl_4613 t1_jdte88l wrote

I will suggest you aggressively pay off or pay down your credit card debt or pay off your personal loans. Register with the three credit bureau to see your actual credit scores, credit karma is not a reliable source for an accurate credit check. After registering with the credit bureau, freeze your credit profile so no one has access to your credit profiles without authorization. DO NOT take out another loan. Best wishes.

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JBerry2012 t1_jdtrpnu wrote

Forget the loan and go with the debt snowball. Pay off the credit card, then the personal loan. Need to save at least 3.5% I think for an FHA loan... Paying the car off could hurt either if you can do it. Also... Make sure you have a small emergency fund at a minimum.

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whitney_k t1_jdti3zv wrote

Please, before you undertake any of this speak with a good lender who understands credit repair. There are things that help and things that harm. I’m an agent with no special knowledge of credit repair, but a big part of credit scoring is age of accounts. I’m afraid a new loan would work against you and you would be better off paying your existing cards down. Please get informed advice before doing anything. Good luck! 🍀

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BastidChimp t1_jdtjr8j wrote

Don't get a loan to pay off your cards. Try using either the Avalanche or the Snowball method to bring down your debt. There are YouTube videos that have extensive information on these two methods. Prep your own meals and refrain from going out to eat. Pause all investments including IRAs. Just invest enough of your salary to receive your company's matching contribution for your 401 K. Once you have ended your debt your options will open up immediately to save and invest more aggressively for a down payment. This will allow you to obtain a favorable mortgage rate from your lender in the future and frees up more cash for your monthly budget.

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PazovackiVojvoda t1_jdto3he wrote

First fix your taxes , that's firs document for pre aproval , depending of that you will see how much you can afford. Also , before you start process of mortgage pay all your debts, be on zero and than start to saving for down payment. Taking loans when you already have one doesn't make any sense because terms and conditions of new loans are horrible for people with already existing debts.

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ESLTATX t1_jdu2okk wrote

We just finished up applying with 12 different mortgage lenders. Only ONE asked us about information on our credit reports. Questions such as, "how much do you pay each month, is your car payment really that high, how often do you make extra payments?" Questions like these helped us get a 255K loan, and keep in mind that we make around 100k total together.

We explained to them that we pay off the credit card in FULL every single month, and pay $40 extra towards our cars. Everything else is about to be paid off in the next 3 to 4 months and we'll be debt free. At any rate, I have been throwing extra payments every month to pay down loan balances to make ourselves look less risky to lenders. (all of my loans, except for my car, are interest free)

All this to say, and I'm not even sure where you're at, we're in Austin, Texas but moving to San Antonio, that we both had significant savings about 50K combined, and a gift of 85K that is being used for a downpayment. Our credit scores are both 775+ and we got a really good deal. But that deal was able to be offered because I was able to drive uber/lyft, donate plasma, and work after school to throw at my stupid debts.

I hope yall are able to get your loan and home eventually, though! but pay off that debt BEFORE applying anywhere, and wait until your credit scores update.

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[deleted] OP t1_jdu34er wrote

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ESLTATX t1_jdu3cef wrote

There's a lot of different loan options out there! Down payment assistance, first time home buyers, closing cost assistance. You just gotta dig deep for those lenders. Try local first and then try national lenders

And congrats on your promotion, too!

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mattazmomma t1_jdu4md9 wrote

I took out a personal loan to pay off two credit cards I had at the time and my outcome was well worth it. I had the loan paid off in less than a year and I only used one credit card for my bills which were on autopay and paid it off completely every month. My credit score increased significantly two months after taking the loan and paying off the credit cards. Additionally, depending on where you look at buying a home, I would suggest looking into a Rural Development Loan. The benefits of this type of loan is comparible to a VA Loan.

Good luck no matter which route you choose!

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unclepup t1_jdu7tqu wrote

OP the reason you should sell your investment now is that you will never get a better guaranteed return on your investment than paying off your credit card bills. No amount of research or investment foresight in the equity markets guarantees you 20% + in return, which is more than likely the amount you are getting charged. Also, if you use the investment money now to pay down your CC debt your credit scores goes up substantially. Your goal is get above 750 when you actually apply for a house or your interest rate will be higher for the house which will cost way more in the long run. Unless you absolutely can guarantee you can 10x the investment in the next 2 years. I don't see why you wouldn't use it to pay down every last one of your debts. get a higher credit score. you can always reinvest at a later time.

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beekaybeegirl t1_jdub5iz wrote

OP since your investment account is your only savings dump the options casino 100% that’s the worst part of all this to me.

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[deleted] OP t1_jducd4x wrote

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phuocsandiego t1_jduet79 wrote

Tell us what your investment strategy is then. 100% certain sounds extremely suspect. And trust me, whatever strategy you came up with has been thought of before. And it didn’t work. If you think you’re smarter than everyone else, which it sounds like you are, you are deluding yourself. Not only will you not have that down payment, you may be in a worse place.

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[deleted] OP t1_jdufjto wrote

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phuocsandiego t1_jdugo6m wrote

So why so coy about what you're holding? Spill the beans and let us poke holes in it.

The difference between you and me is that I don't even need an emergency fund. So you're either going to learn something from folks who have been there and done that. Or you'll be obstinate and you won't.

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Pure_Chart684 t1_jdtnlgd wrote

My theory is that OP is just trolling this sub. Couldn’t imagine worse answers to every question.

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vonnegutfan2 t1_jdtvr8g wrote

CreditKarma has many good points, but it is actually 30-50 points below your real score. I just had a credit pull and my score was 50 points higher than on credit karma.

A personal loan with a lower interest rate is a good idea, don't let the "no debters" scare you.

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Marrymechrispratt t1_jdu4hal wrote

Pay off your debt. Don’t get a loan. Stop using credit cards. Unsubscribe to r/wallstreetbets …yes, I see you.

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Pareia0408 t1_jduhtdn wrote

I'd agree with aggressively paying off the loan you have - don't take a new loan to pay off other loans.

Your best option is to have no more loans / debts leftover when you want to buy your home so you can have a savings fund put aside.

Speaking from experience of using the loan to pay for other loans it was a snowball effect for the worst.

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Phyduex2000 t1_jdui0p8 wrote

Apppreciate that! That is definitley the plan for us. Just to start with the personal loan and pay all the extra to the next highest interest which would be credit card then finally get the car paid off.

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OddballLouLou t1_jdtzyof wrote

Wait! The infrastructure is about to completely collapse. Continue renting.

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Phyduex2000 t1_jdu0a62 wrote

Oh dont I know it! That is percisely why I am preparing!

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andrxito t1_jdudlw1 wrote

Clean out shit you don't use and start selling, there could easily be 1 to 3k of bs you don't use laying around. Pay off the debt first... Everyone said so it's only natural

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Chesnut-Praline-89 t1_jduqvha wrote

OP before you do anything my suggestion would be to talk to a lender and see if you can get prequalified for a mortgage as your credit stands now. You could very well quality for a FHA loan with 3.5% down. Competing in the market is a different story but knowing your baseline would be very helpful so you can prioritize which debts to pay off, if any, to close on your home. Some lenders want cars paid off, others want to see credit cards gone.

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torne_lignum t1_jdv87xv wrote

Banker here. Get rid of all your credit card debt first. Then agressively save for a downpayment. 10-15% is good, but 20% is best. However, I know not everyone can do that. Loans with 20% down avoid having PMI (private mortgage insurance) tacked on. FHA loans require a minimum of 3% down.

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OldDog03 t1_jdtjide wrote

What my old college professor taught us was if you are going to make extra payment on a loan, then that extra should go towards the principle.

What my parents taught me was to not borrow money and save up when we needed to buy some thing.

Look up Dave Ramsey and team for some old fashion advice.

We did borrow money for our house and some investment properties, then paid them off as soon as possible.

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