Dreaming of owning a home is something many of us want, but having a lot of personal debt can put a dent in those aspirations.
Whether it's car loans, personal loans, buy-now-pay-later cards, or credit cards, these financial obligations can seriously cramp your style when it comes to getting a mortgage and buying your dream home.
The reason for this roadblock is simple: the money you're using to pay off your personal debt can't be used to cover your mortgage payments. It's like having your feet tied together when you're trying to take a big step forward in life.
So, what can you do to untangle yourself from all this and boost your chances of getting that (higher) mortgage approved?
- Avoid Adding More Debt: The best way to deal with debt is to not get into it in the first place. Start saving up for your purchases instead of relying on loans and credit cards. It might take a bit of time, but it's worth it in the end.
- Tackle Your Existing Debt: If you're already swimming in debt, prioritise paying it off. Focus on clearing debts with the highest interest rates first. It's like chipping away at a big block of ice – start with the soft spots.
- Ditch the Plastic: Cut up those credit cards and buy-now-pay-later cards. By removing the temptation, you'll be less likely to add to your debt, giving you better control over your finances.
- Think About Debt Consolidation: When you're considering a mortgage, think about consolidating your existing debt. It's a way to bundle up your debts, making them easier to manage and, most likely, reducing the interest rate you pay. While it might not work for everyone, it's worth exploring to maximize your chances of getting that mortgage approved.
Taking these steps might not be easy, but they can pave the way for a debt-free future and bring you closer to that dream home of yours.
Remember, reaching out for some expert advice can make a big difference to give us a shout below or at this link.