At sites like this: http://money.howstuffworks.com/framed.htm?parent=mortgage.htm&url=http://interest.com/calculators/afford-borrow.shtml
they have calculators to see how much home you can afford.
I am trying to figure out what to enter for the "credit card liability."
I have never carried a balance on a credit card. So technically I have no credit card "debt." But I use credit cards for EVERYTHING (almost never use cash), so every month I have over one thousand dollars to pay to my credit cards.
What is the right way to calculate — do they want the amount I am "in debt" (zero) or the average of my monthly credit card bills (over one thousand dollars)? I feel that the latter figure may not accurately represent my actual financial situation, since if I used cash instead of credit cards I could enter "zero" — I just use the cards to earn rewards.
Maybe the real question is — how will the banks calculate it?
I disagree…..I have cards w/ high limits…..never carry a balance and always put ZERO…..
The liability isn’t there if the acct doesn’t have a balance….
Our last home loan application at closing (which is printed)showed just what we filled out at the begininng.
If you don’t carry a balance, then the value is 0.
Credit card liability means, what is your total credit line on credit cards? Paid off or not. For example if you have 3 credit cards with a $1000, $5000, & $2000 credit limit. Then you have a credit card liability of $8000.
The bank wants to know how much you could potentially be indebted to all your lenders.
paula and level6 are correct. if you pay it off each month that will be shown in a good credit score. when it comes time to qualify be sure it is zero!