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Want to buy a land and build home on it. The only debt we have is our home mortgage on our present home. We also have about $8000 in credit card debt.
Now we want to buy the land first, and then save some money. Then we would like to get the construction loan to begin building the house. But my question is should we pay off the credit card deb first or would it be better to save money for a down payment for the construction? What should I do?
pay or save
Hi Juan,
I think if possible it is better to save money, and try paying off the credit card debt at the same time. However, if you can't seem to do the both together, you can pay off the debt first. This will help you in improving your credit score. To qualify for a loan you need to have a good credit score, generally above 700. With a score of 700 and more, you will get loans with low interest rates.
In the meantime you can try saving more money. To save money you need to lessen your expenditures. While going for a shopping first make a list of what you need to buy. Don't buy things that you really don't need. Also make a monthly copy of your income and expenditure. This will help you in handling your budget more easily.
Thanks,
Aaron