Good morning. I hope you are having an amazing week. Since rates are not going down yet, we know affordability is one of the biggest issues for home buyers. For this week’s video I want to discuss a strategy that could help with affordability. Usually when we talk about debt consolidation, we are talking about doing a cash out refinance to pay off debt. That is still an option but today I want to talk about debt consolidation when buying a home.
If you are in a position where you can put down 10% or more when buying a home and have any other debt, you should analyze putting down less and using the additional money to pay off other debt. When you buy a home, every $10k you put down affects your payment between $50 and $70 so using that extra money to pay off debt instead could help you with your monthly budget. So, let’s say you are buying a $500k home and were planning to put down 10% and you decide to do 5% instead. That will give you $25k to pay off debt (credit cards, car loans, etc) which in most cases will save you way more than putting that money towards the mortgage. This strategy could allow you to afford a bigger home and not increase your monthly payments as much.
If you are looking at buying a home, determine your max cash you can bring to closing and what you need your overall monthly payments to look like including debts outside the mortgage. Once you know this, give us a call and let’s look at the whole picture and help you find the right solution.
Cornerstone Mortgage Group
Georgia Residential Mortgage Licensee: 21412 • Company NMLS: 147913 • Individual NMLS: 147938