I have or will be getting $3000 soon. I would like to buy a house and need to save more money for a down?

Question

payment.

I also have about $7000 in debt.

Should I use the savings to pay off bills or save for down payment?

Answer 1

Fiscally, you should use the money to pay down your debt.

But in reality...

If your debt is at a low interest rate, and the debt payment doesn't have too negative an effect on your home buying power or credit score, then it is reasonable keep it open, and save the $$ towards a down payment.

Answer 2

you will most likely need more than $3000 as a down payment on a home.  You say you are in debt, are you behind on the payments for these?  If so then use the money to pay some of that.  

Answer 3

Pay off your bills and lower your debt to income ratio first. Banks will be more willing to lend to you with no outstanding bills on your credit.

Answer 4

Pay off the debt.  Having less debt looks good on a loan application too.

Answer 5

A lot depends on your situation.

Save and buy the house if:  it lowers your monthly bills, like buying a fixer or duplex where you live cheaper than rent.  It makes your income tax bill less. You can afford it.

Pay off the debt if; the interest is high, if you are only making the minimum payments or if it is preventing you from buying the house.

Good Luck

Answer 6

You should pay off the debt first.  If you make minimum payments on that $7000 for 5 years, you will only have paid off about $500.  So, pay off the debt, then when it's all paid off, put the money away that you used to spend paying off the debt, and you'll be a debt free home owner in no time!  (plus you will have a better credit score and a lower interest rate on your house!)