Question:
I am 26 years old and I recently got married. We are looking to buy a house before December 1 so we can take advantage of the $8,000 tax credit. We have around $5,500 on 0 percent interest credit cards and I have $11,000 in student loans at 6.8 percent. My wife’s insurance policy cash value is around $5,500 and mine is around $1,200. We have good credit both above 720’s. Should we cash in our policies and pay off the credit cards so it looks better when we apply for a mortgage? Should we cash them in and use the money as a down payment on a house? After we get the house and the $8,000 tax credit should I use the money to pay off my student loans? Can you use the tax credit as a down payment? Should we put the money in the bank as security and to help make the mortgage payments? What should we do?
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