As a financial expert with extensive experience in credit and mortgage lending, I can provide you with a comprehensive answer to your question about purchasing a house with credit card debt. The ability to buy a house while having credit card debt largely depends on several factors, including your debt-to-income (DTI) ratio, your credit score, and the lender's criteria.

Debt-to-Income Ratio (DTI): This is a critical factor that lenders consider when evaluating your ability to take on additional debt, such as a mortgage. Your DTI ratio is calculated by dividing your total monthly debt payments by your gross monthly income. Lenders prefer a lower DTI ratio, as it indicates that you have a greater capacity to manage your debts without overwhelming your income.

Credit Score: Your credit score is another significant factor. A higher credit score typically indicates a history of responsible credit use and a lower risk to lenders. Credit card debt can impact your credit score negatively if you have high balances or if you've missed payments.

Lender's Criteria: Different lenders have different criteria for approving loans. While some may have a strict DTI ratio limit, others may be more flexible, especially if you have a strong credit history or can provide a larger down payment.

Minimum Debt Payments: The portion of your monthly gross income that goes towards paying the minimum amounts due on your credit card bills and other recurring debts is crucial. If this portion is too high, it may limit the amount of money you have available to allocate towards a mortgage payment.

Mortgage Approval: Most lenders will not approve you for a mortgage if your DTI ratio exceeds 43 percent. However, this is not a hard and fast rule, and there may be exceptions or alternative loan products available.

Strategies to Improve Your Chances:

1. Pay Down Debt: Reducing your credit card debt can lower your DTI ratio and improve your chances of mortgage approval.

2. Increase Income: If possible, increasing your income can also help improve your DTI ratio.

3. Secured Loans: Some lenders offer secured loans that use the property you're purchasing as collateral, which can be an option if you have a high DTI ratio.

4. Government Programs: There are government-backed loan programs that may have more lenient DTI requirements.

In conclusion, while having credit card debt can make it more challenging to secure a mortgage, it is not impossible. By understanding the factors that lenders consider and taking steps to improve your financial position, you can increase your chances of successfully purchasing a home.

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It all depends on what portion of your monthly gross income goes towards paying the minimum amounts due on recurring debts like credit card bills, student loans, car loans, etc. Your debt-to-income ratio matters a lot to lenders. ... Most lenders will not approve you for a mortgage if your DTI ratio exceeds 43 percent.May 7, 2015read more >>