Being in debt can feel like you’re in an extended lousy relationship.
You want to be able to move on with your life, but that dark cloud is hanging over your head.
It can affect your credit score, stop you from spending money on fun things, and may feel endless, so: how is it that so many people can buy homes despite being in debt?
Whip out a house payment calculator!
These are some things you should consider before giving up on your dream of owning a home despite being in debt!
Table of Contents
Use Your Debt To Your Advantage
This may sound impossible, but debt can look good on your credit report if you treat it correctly.
Always make payments on time, preferably for more than the minimum.
That’s all you have to do.
As long as you can stick to this, your credit score will go up, and you’ll have a long-lasting account on your credit report.
This tells lenders that you’re responsible for your debt, and you work to pay it off.
Having long-term accounts on your credit report shows that you’re trustworthy, you’re not flighty, and you’re serious about paying it off.
You can use your debt to your advantage.
Refinance Your Debt
Although not all debt can be refinanced, a lot of it can!
Work with a financial expert on finding a way to refinance your debt and possibly pay it off sooner.
This is best for someone who has a good credit score but can’t afford monthly house payments because of monthly student debt payments.
Also, many debts pass between companies, and with this, their value goes down to the collector.
See if you can bargain your way into a lower payment or owing less altogether.
Look At Your Finances Thoroughly
First, look at your current bills and figure out which expenses can be tossed aside and which need to be lowered.
For example, you can easily save a couple hundred a month by dropping cable television and cooking from home more often if possible.
Although these won’t solve everything, they may make up for the gap your student debt creates.
What’s The Market Like?
Early 2021 started up with a lot of heat on the market and many homes not staying available for more than a couple of weeks.
This means that buyers have to be highly competitive.
Fortunately, the tide will shift, like it always does, and you may go back into a buyer’s market where there are more homes than buyers.
A buyer’s market is a homebuyer-in-debt’s dream!
You can negotiate the price down, possibly get the seller to cover closing fees, and look into saving money on the whole deal.
If you’re in a buyer’s market and have your debt under control, it may be time to let yourself buy your home!
Just keep a careful eye on your finances, and you will be able to Buy a House While in Debt!