Advice on paying off debt or buying a home?

I am just looking for advice. Please don't try to sell anything to me. I owed $35K in credit. It may take me 1 year or so to pay it off. Then I'll be almost debt free.





Is it better to save $35K to buy a second home while making payment on the credit both credit cards or pay off the credit cards completely and buy the house later? Why one option would be better than the other.Advice on paying off debt or buying a home?
A second home?





That debt may affect your ability to even get a home loan in this market. Pay down your debt, and then look on to the second home.





Actually, in my opinion, I would look to invest in a Roth IRA or some type of retirement plan before looking at a second home. Is this simply a second home you will vacation in, moving out of your primary residence, or is that you simply want to own a second home? These questions will help you decide whether this a priority or not. But I would pay off the debt first then look into retirement.Advice on paying off debt or buying a home?
You have good question. The answer however is not easily provided. First, traditional thinking would say you should compare the interest rate on your savings and compare it with the interest cost on your credit card. You should pay off the credit card if it is higher than what you are earnings on savings. It should also be noted, however, these are not typical times. It goes without saying you should pay off any and all debt and accumulate as much cash as you can. I would delay any decision to buy a second house in today's economy. You might very well need the money.
It's definitely better to pay off the credit card debt before purchasing the second home. You can think about it in returns. If you invested in a second home, you may get an annual appreciation of 4%-ish a year (plus another mortgage payment, plus taxes and insurance, plus repair costs...you get the point). If you pay off the credit cards, you'll be saving 12-25%-ish a year. Not paying that interest is very similar to making it!


The answer about even qualifying for a second mortgage during this time with that much outstanding debt is a very good point as well.
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