CAN YOU BUY A HOUSE WITH A CREDIT CARD?!?!?!?
my friend and i were wondering if you could buy a house with a credit card. I say no and she wants to know why
- 1 decade agoFavorite Answer
I did it about 10 years ago. I cash advanced 2 credit card and bought a $30k house in Erie Pa for a rental. The banks wanted 30% down and I did not have it so I bought the place on a cash advance of my credit cards waited 6 months got the place appraised for $50k and refinanced it and paid off my credit card. The place was used for a college rental, so I was getting $1100 a month in rent from the kids so I had no cash flow problems, but I would not suggest trying for a personal home.
- 4 years ago
While it is true lenders would like for you to close credit cards before applying for a mortgage ,, as they think that will prevent you from running up credit card debt leaving you less able to pay your new mortgage,, Closing them rarely has the desired effect ... Plenty of home buyers have found that out the hard way ... They'd transfer balances onto a couple cards with low interest rates then close the old cards ... And then get killed on their FICO scores ... Part of your credit score is your revolving credit utilization,, (that's the amount you are carrying on your credit cards vs your total credit available from all your reported cards .) So,, If you are carrying any balances and you close a card, your revolving utilization will go up even if your balance decreased or stayed the same as you have less available revolving credit , and FICO scoring doesn't like high revolving utilization,, Depending on your credit,, and I'm figuring your credit file is rather thin as you are only 24,, closing any cards in an attempt to raise your credit score if you are carrying high balances is (will be) a BAD move ... The cards you should close are ones that don't report to the credit bureau's, since the credit bureau's don't factor those in your scores anyway,, , then you'll be ok,, The best way to tweak your credit scores prior to applying for a mortgage is to pay off your credit cards or pay down the balances as much as you can ... then you can evaluate closing cards,,, Good luck .. .
- efflandtLv 71 decade ago
Nobody is going to let you buy a house with credit card(s) unless it is overpriced, because they would not want to pay the merchant fees. They would not let you use it for down payment either, because that has to be seasoned cash (in your account statement long enough to know from your credit report that it is not a loan).
When I was not sure if a deposit had cleared yet, CarMax would not let me use a ($30k+ limit) credit card to buy a $14,000 vehicle. They made me apply for a loan instead. But I paid it off within 3 days so there was no interest or fee.
PS: Maybe you could with cash advance or balance transfer check. But either would typically cost you 3-4% fee and non-deductible interest (higher interest than purchases if cash advance).
- rtfmLv 71 decade ago
No for a lot of reasons: Nobody would have that much credit available to them on a credit card. Nobody would be able to pay the monthly minimum payments for such a large purchase. And hopefully, nobody would be stupid enough to agree to buy a house at the high interest rates most credit cards charge, compared to most mortgage rates.
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- 1 decade ago
I would say yes. american express has no credit limit, so they say, so theoretically you could buy a house. You couldn't move right away. I guess it could be a cash advance too. Of course, that doesn't get into the question of how to pay for it off. you would get some serious rewards.