[USER]

My husband finally got approved for 100% VA disability.

It should back pay from his exit date totalling $25k (tax free!!).

Would it be best to use this as a down-payment for a house, use it to pay off debt, or a mix of both?

I’d love to hear your thoughts and experiences—what would you recommend and why?

How did you approach a similar situation, and what were the outcomes?

Any advice on balancing financial priorities would be greatly appreciated!

[Jennifer]

Depending on how much debt you’re talking about. Buying a house isn’t just about how much money you can put down.

If he’s a veteran, he can qualify for a VA loan which means little to no money down and less percentage in interest rates.

You will still need to have a decent DTI (debt-to-income ratio), so I suggest paying off the debt (or at least the highest-interest ones) and saving the rest for the house.

[Sonia]

I would say that dependsbon the numbers. How much is the debt, how much is the house/down payment, current rent?

What is your income and expenses?

There’s a lot of variables to consider.

[Shirley]

Put into a high yield savings for now. As a veteran you can buy a house with 100% financing.

But then you have to look at what the monthly payment will be and can you afford it.

At that point you may need this windfall to pay it down or make repairs.

If you been able to live without before, then just let it sit in the bank.

Figure out another way to pay down any debt.

[Sandi]

Get rid as much debt as you can that’s costing you interest. Make sure you understand that if something happens to him you will not continue getting that.

Not knowing your circumstances, I’m cautiously giving you a heads up.

Been there.

[Sarah]

Pay off debt and change habits to avoid debt in future. Having a house should be a blessing and having no consumer debt, with a 3-6 month emergency fund and a decent down payment will help make it a blessing!

[Emily]

Pay off debt! Emergency fund! High interest savings account!

[Darla]

If you use it as a down payment, you’re creating a 2nd debt.
Pay off 1st debt and keep a small amount in emergency savings.

Then focus on getting a home.

Your debt will be gone which will be good for your credit score.

Thank him for his service!

[Karen]

You don’t want to buy something that you can’t afford once you’re retired.

If your husband is now permanently disabled, he can’t go out and get a job to help with the mortgage so all of that needs to be considered.

[Gloria]

I would pay off debt and meet basic medical needs. It took forever for my partner to be approved for disability.

We paid down debt from their medical bills, went to the dentist and got glasses.

[Author]

Posts