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We have 63,000 in credit card debt and want to buy a home so we don’t have to rent. Our credit score is “GOOD” and we have been preapproved for a home loan but we cannot make a home loan payment because of what we pay out monthly on credit cards. If we did a debt settlement we would be able to make a house payment. My question is do we get a home loan BEFORE we do a debt settlement since our credit is good now? If we did the debt settlement first would we still be able to get a home loan?

If you want my honest opinion (and please realize I am not a financial expert), you should not buy a home if you cannot afford the payments along with your current credit card debt load (which is large). You should first take care of your credit card debts, then look into purchasing a home. Adding more debt (a mortgage) to an already strained financial situation is asking for trouble.

Debt settlement will hurt your credit for many years so if you go that route you will not be able to get a home loan until enough time has passed for you to complete the program AND rebuild your credit score. If you enter into a debt settlement program before you get the home loan, I’d be shocked if the pre-approval was honored at all.

If you are able to get a home and then enter into a debt settlement program, you are taking a huge risk because you are adding debt and there is never any guarantee that the debt settlement program will be successful. It depends on:

1. The amount of your debt
2. The age of your debt (how far behind are you, if at all)
3. Who your creditors are
4. Which debt settlement company you decide to use
5. Etc…etc…

So, in my opinion, a new home loan would be adding debt on top of debt you are already having trouble paying….just my 2 cents. Good luck.