By you not paying off your credit card debt today and keeping $7000 in a savings account, you’re basically paying 26% apr (or whatever your credit card apr) for that. You should take $6,000 out and apply it to your credit card today and keep $1,000 in you’re emergency fund then start rebuilding your emergency fund.

Anything 740 and above is considered top tier credit. You can easy get a good “rate” with a lower score though and with FHA anything 640 and above will get you the same pricing. There are no adjustments on pricing with FHA if your score is 640 or above.

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>A personal loan won’t help your credit score, just lower the length of your credit history which is a negative.

This is the big issue. You will hurt your chances of a mortgage approval in general. An underwriter will most likely look at it and see you trying to borrow a lot in a little time and think you are high risk. I work with first time buyers quite a bit.

>With a credit score of 655 you're not likely to get a good rate on any loan

Perhaps a bit OTT when the total is out of 710?

Your money in your investment account shouldn’t be considered both your “emergency savings” AND “potential down payment for a house” AND “an inbestment” Yes, it can be liquidated but 9k in investment won’t be 9k when you liquidate it.

I am curious to know how much you make

I am including your personal loans and cc when I said “high interest debt”. I know one of them is at a lower 9%. Not the low interest you get on a mortgage so should still be cleared - last - but cleared. Buried = negative net worth. OP, it sounds like you are paying the debts off and heading in the right direction. You asked for advice on how best approach it, you got it, you are free to ignore said advice. It’s free advice and we are not professionals :) perhaps just people further ahead in the financial journey than you.

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Apppreciate that! That is definitley the plan for us. Just to start with the personal loan and pay all the extra to the next highest interest which would be credit card then finally get the car paid off.

I'd agree with aggressively paying off the loan you have - don't take a new loan to pay off other loans.

Your best option is to have no more loans / debts leftover when you want to buy your home so you can have a savings fund put aside.

Speaking from experience of using the loan to pay for other loans it was a snowball effect for the worst.

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If something happens, you use the credit cards - which means you use them and pay that interest when you absolutely have to, instead you will be paying said CC interest regardless at the moment. You will not be worse off than you are right now.

Edit: but longer term, build up an emergency fund. That comes AFTER clearing high interest debt which you are buried under. In the absolutely starting point you find yourself in, emergency = back into debt, but that’s why everyone is telling you to reevaluate your situation.

So why so coy about what you're holding? Spill the beans and let us poke holes in it.

The difference between you and me is that I don't even need an emergency fund. So you're either going to learn something from folks who have been there and done that. Or you'll be obstinate and you won't.

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OP, stop looking at this as different pots of money. If you have such huge debts, you don’t have ANY life savings. They cancel each other out.

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Tell us what your investment strategy is then. 100% certain sounds extremely suspect. And trust me, whatever strategy you came up with has been thought of before. And it didn’t work. If you think you’re smarter than everyone else, which it sounds like you are, you are deluding yourself. Not only will you not have that down payment, you may be in a worse place.

Im sorry, I might’ve been a bit harsh.

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You’re right, having emergency savings is very important.

On another note, it can be risky to have all of your emergency savings in stocks.

In the same way how one can lose their job in a recession, your (savings) investments can shrink or even cease to exist. That’s double trouble. Triple if you count the debts too.

Then you still have debt, less savings and reduced/no income. The debt will not wait for the recession to be over; month by month, it piles back on. Snowballing if you will.

If you pay off your debts, you can guarantee that you’re no longer losing more money to interest. Each month, the money you would’ve paid towards your loan & interest, can go to savings. You can’t guarantee that you’ll make money in investments.

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