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will be getting inheritance of 40k, should I pay down my debt, or use this for a down payment?

We are trying to purchase a property for $325k, and are able to put 5% down currently. Our income is 110k, and debt is 31k. my question is, does it make more sense to increase the down payment, or pay down the debt? by sara.g74860 from North Las Vegas, Nevada. Oct 26th 2015 Reply


Brad Henderson (bradthelender)
#29 ranked lender in Nevada - 18 contributions

It would come down to the specifics of your scenario to know for sure but in general, debt has higher rates than mortgages so usually that is the better choice. If it was enough to get you to 20% down so you could avoid mortgage insurance, that would probably be the way to go but it doesn't sound like that is the case. We can discuss the options once we do an application so call or e-mail me at your convenience. Brad Henderson NMLS 16484 702-328-3043 brad.henderson@novahomeloans.com

Oct 26th 2015
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I would pay down debt, in that it would probably alleviate your payments better if you paid off the debt as opposed to an additional $31,000 on a property as far as the difference in payment on a 30 year loan

Oct 26th 2015
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Adam Itchkawich (AdamItchkawich)
#36 ranked lender in Nevada - 8 contributions

Most likely debt, but, before you do anything, have an originator look at the big picture first. You want to be sure that you are strategic about what you are doing.

Oct 26th 2015
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John Brassner (john@john4realty.com)
#19 ranked lender in Nevada - 5 contributions

If the debt is credit card debt (or other high-interest debt), most likely paying that off is just more sound financially. Your lender should be able to counsel you on the best action plan. If you don't have a professional real estate agent yet, I would be happy to interview for the job.Best regards,-John Brassner

Oct 26th 2015
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 7,802 contributions

Ask any financial planner and they will tell you that Cash is KING!! You need to understand that money put towards a home is not secure.. meaning, no matter how much equity you have, if you lose your ability to earn an income and cannot maintain the payments, then you could be foreclosed on.. Financial planners say you should have savings because if you were to lose your job, you would have enough in savings to maintain your monthly obligations for months while you seek new employment or get healthy.. Also, there are many secure investment vehicles like mutual funds for example, that average 8% to 12%, some even more.. if you can borrow for 4.5% and end up paying as much as an additional 1% in mortgage insurance, your still better off putting the money in a brokerage account.. Now if you have debt where the interest is greater than 8% then it might be a good idea to pay it off, but i'm sticking to what my financial planner told me years ago.. Cash is KING!! I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

Oct 26th 2015
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Stephen Rickman (stephen.rickman@alderus.net)
#52 ranked lender in Nevada - 2 contributions

We have a full consultation process that we do with all of our clients, as we are all Certified Mortgage Planners which is a rarity in our industry! We have a number of tools and financial modules at our disposal that will allow you to make the best educated decision based upon your unique situation. I will never make a decision for you. Let alone, give you a bunch of rhetoric that a lot of professionals in our industry will. Give me a call if you like what you have read, and we can truly find a suitable situation for your circumstances. Stephen Rickman NMLS#363844 702-366-4299 stephen.rickman@alderus.net

Oct 26th 2015
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Sean Young (SeanYoung)
#2 ranked lender in Colorado - 1,106 contributions

Without knowing the specifics, I would say off hand to pay down your debt. Mortgage interest is tax deductible, credit card debt is not. With a 5% down payment, if going conventional, you should also inquire with your loan officer about buying out of your mortgage insurance. This may save you some additional money depending on your credit score.

Oct 27th 2015
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