High DTI - 30k Cash

[Dyanne C.]

Hi everyone,

I have a mortgage on my primary home for about 90k and it is worth about 110k. I only put 5% down because I wanted to hold on to the cash for future investments, it's luckily appreciated a bit which is how I've built some equity, but not enough to pull from.

I also carry a small amount of credit card debt which is at 0% interest but I'm considering paying down just to help with my DTI. As it is now I've been approved for conventional financing for a home with a purchase price of 50k and 25% down.

I am not going to invest in Miami since there is now way I'll get anywhere with those numbers, although ironically when I applied here I was approved based on the market rents, I would have been fine if the mortgage was 75% of the rent, I just couldn't find anything that could cash flow after insurance/taxes.

So instead I'm investing out of state. Specifically Cleveland, OH, but I'm trying to decide if I take some of the cash and pay off all the cards (6k) or just move forward with a 50k home and buy property #2 in about 6 months.

OR have I started too early and should I sit back and save more cash?