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Mortgage DP or pay down CC debts?
First question here so bear with me. I am wanting to buy my first home in the next few months. I looked into it in January and my low credit score was 517. I've done some work since then and Credit Karma tells me the TU score is now 623. I expect it to go up about 20 points in the next few weeks as I take care of a collection (yes, I am trying PFD). Other than the one collection I've got a few bills 30 days overdue in the past 9 months or so, my biggest problem (it seems) is with my credit to debt ratio. It's high.

I am working a very small PT job in addition to my regular job and I am guaranteed to gross about $5700 over the next 7 months from it. I intend on using this to pay down some of my credit card balances. I will also be getting a $5K bonus from my regular job in November. I've got about $4K in savings that I planned on using for a down payment on the house.

My question is, in terms of getting a mortgage, would it be better to use all of these extra bucks to increase the down payment (which might help my CS/mortgage chances) or towards paying down the debt (which might help my CS/mortgage chances)?

If it helps, I live in a relatively low income area and a really, really nice house with property can be had for $79K. I've seen some I liked for as low as $35K but they need a little work or are in a neighborhood it wouldn't be safe for me to live in.

Any advice would be appreciated.

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1. If you have 4k in saving and have debts accruing interest and will be paying 4k or more towards those debts before you rbuy the house, why not use the 4k to pay off the debts now and pay yourself as you would the credit card + the interest you would have been paying to the credit cards -- seems liek this shoudl save you money provided you have a safety net.

2. Do not ever be 30 days late-- this has a very big effect on yor credit score even if right now debt-to-income is the higher factor. You do not want to work hard to pay off your debts just to see your score not rebound as much due to silly 30 day late payments.

3. How do you plan to finance the home? An FHA loan? A regular morgage? You should look into that. Would you be paying PMI? All fo these have criteria for minimum credit score but also for minimum down payment.

It seems that you need to print out your credit report and talk to a lender (whom you should nto allow to pull your credit report yet) and have the lender review it and make recommendations based on your loan options.

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