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Which is better when trying to buy a house? Less Debt or More Down Payment?


My husband and I are planning on buying a house next year. Before that we are planning on moving in to a less expensive apartment for a few months to save some money.
My question is given this extra money which is the better investment? Should I pay off debts in order to improve our credit score? Or save it to have a higher down payment for the house?

Better credit score! Which means better rates...The amount that you'd be able to put down wouldn't make that much of a difference in your payments, but a better rate means lower payments!

A better credit score means lower finance rates. Plus paying off those debts now will help you in the long run.

Duh! . . . more down payment

Pay off your debts all but three, make your payments on time. A good credit rating will mean lower interest rates for you. Also you might tie up a house with a lease option to buy.

Go to a mortgage broker before deciding to spend your money. Tell him just what you're trying to do. Ask what the difference would be in your present ability to buy if you did either of those two things.

Less Debt

Having more equity in your house won't pay the mortgage, the utility bills, lawn care, etc... And taxes and insurance only go up, it won't help you if you have lots of bills to pay and put all that $$ into the down payment.

Pay the least amount of down payment you can. You should consider some solid mutual funds or investments - a house won't pay the medical bills or college fees for your kids...

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