We are planning on buying a new house. We have enough money to put a 20% down payment. We also have credit card and car payment debt that is a little less than the 20% we could use for the house. The interest rate on the card is 4.99%. The car loan is 6.4%. The home loan will probably be 6+%. Since the interest rate on the credit card is less than the rate of the home loan, would it be better to put the 20% down on the house and then try to pay off the card and car loan in a few years or would it be better to pay off the card and car loan now and and just put 5% down on the house and have to pay PMI? Or maybe something in between like pay off the card but not the car (or vice versa) and put 10% down on the house. Is there a calculator out there somewhere to calculate the cheapest route?

Thanks...
We are working on paying down the credit card and car loan. At current rate they should both be paid off in about 4 years.

Pay off the car and credit first. The interest on the house is tax deductible, where as the others are not. so 6.25% on the mortgage actually becomes (6.25% x (1-marginal tax rate (say 25%) = 4.68%. As long as your PMI is less than (6.25% - 4.68%) 1.57% of your home value it is worth paying off your other debt first.

I have a little bit of a different take on this.....First off, no matter what the credit card companies tell you, you never have a fixed rate...They can change it at will....Now all of a sudden they see a house payment going out, and these pricks decide to increase your interest rate.... Credit Card companies are evil. Dump the credit card.

No matter what, never ever ever ever ever, go into a home loan that is an ARM....Make sure your mortgage is fixed!!!!

The interest rates aren't very high on the credit card or the car, so I would go ahead and put a down payment on a house. Good luck!