Buying a home while carrying debt can feel like trying to move a sofa through a narrow doorway while also holding three grocery bags. Technically possible, but some planning would make the experience considerably less painful.

A question I often hear is, “Can I roll my credit cards and other debts into the mortgage when I buy a home?” Sometimes there is a way to accomplish a similar goal, but it is important to understand what a purchase mortgage can—and cannot—do.

You normally can’t add debt to the purchase price

A purchase mortgage is used to buy the property. You generally cannot purchase a $500,000 home, add $30,000 of credit-card debt and simply apply for a $530,000 mortgage.

The mortgage is based on the property’s purchase price and lending value, subject to the required down payment. For homes below $1.5 million, the minimum down payment generally begins at 5%, with 10% required on the portion above $500,000. Homes priced at $1.5 million or more require at least 20% down.

Unfortunately, the bank does not consider your collection of Visa statements to be a charming architectural feature worth financing.

Your down-payment strategy may create another option

Suppose you have enough savings to make a 20% down payment, but you also have high-interest debt. Depending on your qualifications, it may make sense to use a smaller down payment and direct some of your available cash toward paying off that debt.

You are not technically adding the debts to the mortgage. Instead, you are rearranging how your own money is used.

For example, reducing the down payment could leave enough cash to eliminate a credit card charging 20% interest. However, putting down less than 20% will normally require mortgage default insurance, and the larger mortgage will increase your payment. The numbers need to be compared carefully before deciding.

Paying off debt may also help you qualify

Lenders consider your monthly debt obligations when calculating how much mortgage you can afford. Car loans, credit cards and lines of credit can reduce your purchasing power—even when the balances do not seem particularly large.

In some cases, paying off a debt before closing can improve the application enough to make the purchase possible. The lender may require proof that the balance has been paid and the account may need to be closed or reduced before the mortgage funds.

This should be planned before removing conditions, not three days before possession while everyone involved develops a nervous eye twitch.

Refinancing later is different

Once you own a home and build sufficient equity, refinancing may allow you to borrow against that equity and consolidate other debts. Homeowners can usually borrow up to 80% of the property’s value, including the existing mortgage balance.

That does not mean buying today automatically creates enough equity to refinance tomorrow. Your down payment, property value, closing costs, qualification and lender policies all matter.

A lower payment is not the same as less debt

Moving high-interest debt into a mortgage can reduce the interest rate and monthly payment. It can also stretch debt that might have been repaid over three years across 20 or 25 years.

The strategy works best when it includes a plan to avoid rebuilding the credit-card balances. Otherwise, you may end up with a bigger mortgage and brand-new card debt—which is less “consolidation” and more “debt reunion tour.”

Before buying, I can review your debts, savings and down payment to determine whether restructuring them could improve both your qualification and your monthly budget.