Can we still get a home loan with high credit card debt? We are hoping to be able to buy our first home.

Asked by Mar05, 55343 Mon Jun 1, 2009

We have never owned a home. We have good credit, 62,000 a year , we are currently paying 1200.00 for rent. We did have a discharged chapter 13 9 years ago. We have High credit card debt. About 1000 in payments a month. We are never late on paments. Do we have any hope getin a home loan. We don;t have the funds to pay off the credit cards but we are no longer using them. I have tried different mortgage calculators, and it seems like the cc debt doesn't allow enough or a loan for a home. Does anyone know if there is a way around this? Thanks!

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Kim Eisen, Agent, Twin Cities, MN
Tue Jun 11, 2013
I would look at some first time home buyer programs as some have higher debt to income ratios. The payments they will use for your credit cards is the 'required' amount that they ask for monthly (just in case you are paying more). In the end, it will be up to the underwriter, but the loan officer should be able to run you through desktop underwriting or an in house underwriter.

Start there with a good loan officer/broker that has a variety of programs available to them. The brokers usually have 'other' alternatives. At the very least, you'll know where you stand and what is your next step.

I'd be happy to help once you get pre-approved and we can go power shopping ; ))

If you like this answer or if it was useful to you, a quick click on the green 'thumbs up' would be appreciated.

Kim Eisen
"Helping People Make Smart Real Estate Decisions since 1980"
(651) 457-HOME (4663)
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Jessica Free…, Agent, Plymouth, MN
Tue Jun 11, 2013
You should really talk with Betsy Lowther. She has every program under the sun and could best fit your needs. Please contact her at Or else talk with your bank. Just make sure not to have your credit pulled too many times, can take a hit on your credit score. I grew up in 55343, graduated from Hopkins High School and bought my first home there too. Great area! Best of luck!
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Chase Lenz, Agent, Minneapolis, MN
Sun Jan 6, 2013
How are you doing with your debt?
If you have it paid down a little more and still have solid income you should be able to qualify for a loan.
Sherri Sherpy is a great loan officer to contact. She provides awesome customer service and is great at getting person pre qualified with high debt.
Give her a call and she will be able to quickly analyze your situation and let you know if you can get pre-qualified. 612-363-1106 Let her know that Chase sent you over.

Then contact me and we can set up a home search based on what your looking for!

Chase Lenz
Realtor/Financial Advisor
0 votes
Aaron Dickin…, Agent, Champlin, MN
Mon Jun 1, 2009
Why do you want to add so much more debt when you cannot pay off the current debt?

Are you going to buy something that has a lower monthly payment than your rent?

Do you have the 3.5% of the purchase price of the home that you are going to need to pay as down payment?

Do you have any reserves set up?

The MN Homeownership Center is a good place to go for advice: - you need to reduce you credit card bills though... that is WAAAAY too much debt!
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Marzena Melby, Agent, Edina, MN
Mon Jun 1, 2009
The best thing is to take a local home buyer seminar, best through a non-profit organization. You will learn a lot about buying a home. It's not just having enough cash flow to get preapproved, but also to have extra money (a "rainy day" fund). Things come up in life and you need to be able to handle financial pressures. I work with many first-time home buyers and discuss with them all aspects of buying a home, including buying a home that is solid and doesn't require lots of investment to make it livable.
Feel free to call me with any questions at 612-267-6798.
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Erin Birming…, , Memphis, TN
Mon Jun 1, 2009
Your first step should be to go and get pre-qualified with your local mortgage company. High credit card debt doesn't necessarily matter if you make enough money. Your lender will look at your credit score and your debt to income ratio. Someone who makes $3,000 a month but their debt is $2,500 per month means your debt to income is high. Its based on a percentage. If you make $3,000 per month and only have $500 in bills, you've got a much lower DTI (Debt to income ratio) and your chances of getting approved for a mortgage are much better.

Your Bankruptcy has been discharged long enough that it shouldn't matter. If you pay your bills on time and don't have any major late pays, you should be okay.
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