Buying First Home... Interesting Situation
$35,000 in debt split between CC and LoC at RBC.
House is for sale, I want to buy it, it is $40,000.
Self employed small business owner, avg monthly income for past 2 years about $1500.
I have been paying around $400/month in interest on my debt + the $300 for minimum CC payment for the past few years, so $700/mo., while not making any headway on my debt, also while living with family. Never missed any payments though, I always find a way to make things work, but these interest payments have been decreasing my quality of life.
I want to consolidate my debts and get a mortgage, after which I should be paying LESS than I am now for my current debts, make progress on the total because the interest is much lower, AND also have my own home.
Mortgage broker told me I have no chance of getting a mortgage or loan because of my debt to income ratio, and that RBC probably wouldnt increase my limit. Suggested that I try to go to another bank, or multiple banks, to get a line(s) of credit worth $40,000. Buy the house. Return to him to get mortgage, and use that mortgage to pay off lines of credit for home, and all remaining CC/LoC debt at RBC.
My questions are:
Is this the best way to go about it, and/or is there any other way to do this?
Assuming I get the Lines of Credit to buy the house, is it possible to purchase the house, go back to the mortgage broker, get the mortgage and pay off the Lines of Credit withing a short period of time to avoid paying the interest on the lines of credit (which would be 6x higher than the mortgage interest)?
If any more details are necessary just let me know.
Thank you all for taking the time to read, I look forward to seeing what you guys think.
Edit: Forgot to mention, I also own a 40-acre piece of farmland. Is it possible to use this as collateral in any way?