House hack questions

[Account Closed]

Hey guys I'm looking into getting my first house hack within the next 6-7 months. Couple questions if anyone can offer advice I'd greatly appreciate it! So I plan on going with the FHA 3.5% down and hopefully going for something in the 3-400k range in a neighborhood like back of the yards, mt greenwood, south shore but also open to other options. My dilemma is that I have about 7k in credit card debt and a $600 a month car payment. I have another car that's paid off that I am going to sell for around 15k. I don't have much for savings so one of my main questions is should I pay off my card and some of my car with the money or put it on the 3.5% down payment? I made 50k last year on taxes and have a 700 credit score. Thanks

[Rick Albert]

This is a lender and personal question.

Lenders look at your monthly Debt-to-Income Ratio. The more monthly debt you have, the lower the purchasing power.

You also don't have much for savings, there are often surprises when owning a property that you should have some reserves for.

I'm not a financial advisor, but on the surface, I would sell the car for $15K, put $7K towards the credit card and the rest into savings.

Also, with the $7K in credit card debt, you need to ask yourself "why do I have this debt?" Then make sure you put personal best practices in place to not put yourself in this position in the future.