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kim090807 · Joined: 20 Sep 2009 Posts: 55 -0.01 Dollars($)

I am interested in buying my first home within the next year. I'm wondering which will have the better effect on obtaining a better interest rate: a bigger down payment or paying off more (or all of credit card debt). For example, which would afford a lower interest rate (given everything else the same): a 3% down payment with $5,000 in credit card debt or a 10% down payment with no credit card debt?

gmakerley · Posted: Mon Oct 05, 2009 9:14 am Post subject:

without specifics about your current debt, your ratios and your credit scores, it's pretty much impossible to give you a straight answer. also, the product under which you seek such a loan is critical to the answer. if you are seeking fha financing, it won't make a lick of difference if you borrow 96.5% of the price or 90% of the price.

as i look at your question again, i see a contradiction. your two plans are this, i guess: 3% down with lots of debt (which would mean you have plenty of savings); or 10% down with no debt (which would mean you'll have no savings left afterward). is this right, or have you made an error in your description?

gmakerley · Posted: Mon Oct 05, 2009 9:28 am Post subject:

i should have known that your post was bogus. i hope nobody else wastes their time responding to your folly.

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Bigger Down Payment or Smaller Existing Debt?