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Is it possible to buy a house despite credit card debt?

A fellow caregiver asked...

I am wanting to buy a small house.  My husband is in the final stages of Alzheimer's and I am his 24/7/365 caregiver.  We live in an very small apartment that has lots of issues. That is the reason I would like a small house.  But, before I found out the my husband had Alzheimer's he had racked up so much credit card debt.  I don't know what to do.  I am lost and have no family for support.  He is a veteran.  After losing everything I still have his credit card fiasco.  He would have to be on the deed.  What should I do?

Expert Answer

Steve Weisman hosts the nationally syndicated radio show A Touch of Grey, heard on more than 50 stations, including WABC in New York City and KRLA in Los Angeles. He is a practicing lawyer specializing in estate planning and is admitted to practice before the United States Supreme Court. He's a public speaker and commentator who has appeared on many radio and television shows throughout the country, and he's the legal editor of Talkers magazine, the preeminent trade publication of talk radio. His latest book is The Truth About Avoiding Scams.

In order to obtain the mortgage financing necessary to buy a house, you will need to have a Durable Power of Attorney or be appointed as your husband's guardian. Otherwise, you will not be able to act on his behalf. You should look into whether your particular state would allow you and your husband to take title to the new home as "tenants by the entirety," which is allowed in some states. This would protect the home from being subject to claims by the credit card companies.

You need to meet with a financial planner to help you sort out this situation. A financial planner will help you budget to be able to meet your expenses including the new mortgage costs, and whether it makes sense to transfer your credit card debt into a new mortgage loan.

However, you may find that the institution that you go to for mortgage financing may require that the credit card debt be paid off.