Consolidating credit card debt into my Mortgage loan?
I am looking to buy a property in Columbus, Ohio. I have been approved for a $50,000 loan (Not looking for a fancy house, just something small that suffices my needs), but I have slightly over $7,000 worth of credit card debt. Is it possible to buy a home for, let's say $40,000, and then increase my mortgage to $47,000 by adding my credit card debt to the loan?
Is there any possible way to do this?
Thank you in advance!!!!!!!!!!!
Also, I'm a first-time home buyer
--I don't have student loan debt.
I only have Credit Card debt.
- pagodaboy2001Lv 51 decade agoFavorite Answer
No you won't be able to because a mortgage is a secured loan. You won't find a lender that will lend more than 100% of the home value. If you don't have 20% down you'll pay pmi as well. Pay off your credit card debt, save some money up for down payment and get something where the payments are no more than 30% of your take home pay.
- 4 years ago
Not usually in the purchasing mortgage. After you own the house you can get either Home Equity Line of Credit (HELOC) which isn't easy in this economy, or refinance the home and incorporate the debt into the refi. I REALLY don't recommend this as you're eating up the equity in your home and you'll end up paying interest on that money for 30 years. So instead of making minimum payments and getting it paid off in 10 years, you;re looking at interest payments for 30 years! Now, if your plan is to put one credit card into the mortgage and put that regular payment into your other cards to pay them down and then use all that additional cash to make higher mortgage payments and get the whole thing paid off in 15 years, then by all means do it. But if you don't have the discipline, don't do it.
- 1 decade ago
What you are talking about is more of an equity loan than a purchase money loan. You can't roll in your credit card debt when purchasing the house.
Other things you might want to consider...
Can you afford the house payment (including taxes, insurance, and monthly home owner costs like repairs) AND the $7,000 debt.
Is your debt to income ratio going to be high, thus causing you to be a borrower that is harder to get a loan for.
Are the debts reducing your credit score?
I highly recommend reading Dave Ramsey books. He is a great motivator for how to get out of debt!!!!
Good luck!Source(s): I'm a mortgage broker.
- MadManLv 71 decade ago
Even if you could, you should not. Because if you do, you are converting an unsecured debt, credit cards, into a secured debt. That means that if you cannot pay it, they can foreclose on your home. As unsecured debt, they is a limit as to what they can do.
As the other person said, pay down your credit card debt separately.