3 Simple Ways to Wipe Out Your Credit Card Debt Before You Buy a Home.
Are you struggling to navigate credit card debt while trying to save for a house? In this week's update I’ll aim to equip you with three straightforward strategies to help you wipe out your credit card debt quickly.
With these practical tips you'll get your finances in shape and be on your way to owning your own home in no time!?
How Credit Card Debt Affects Home Buying
If you have high credit card debt, it could make it tough to get a home loan. Why? Lenders look at how much of your income goes toward paying off debts (that's your debt-to-income ratio). If you're weighed down by credit card debt (or any debt for that matter), lenders might think twice about giving you a home loan.
Plus, credit card debt comes with high-interest rates, meaning you pay more than what you originally spent. This eats into your savings, which you need for that house deposit. So, it's really key to tackle that credit card debt head-on to get your finances ready for buying a house.
Strategies to Crush Your Credit Card Debt Once And For All!
Once You Have Paid Down Your Credit Card Debt - Reduce The Limit.
When Lenders assess a home loan application, they actually take into account your credit card limits, not just the balance you have owing.
Even if you have a credit card with no balance or consistently pay it off in full, the actual credit card limit will still impact your borrowing power.
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Lenders will calculate your borrowing potential based on the assumption that you could draw up to the limit of your credit card at any time, regardless of your intentions. The higher the limit, the more your borrowing power is reduced, so once you have made a dent in that credit card balance aim to reduce the limit as well.
Moving from dealing with debt to owning a home takes commitment and clever money management.
Keep your eye on the prize and remember, every extra payment gets you closer to that dream home.
When it's finally time to get that mortgage, you'll be in great shape: minimal debt and a solid history of smart spending.
It's not just about owning property; it's about building a secure financial life. Stick with it, and soon enough, you'll make the leap from paying off debt to getting the keys to your own home. Feel free to reach out if you need a hand!
Warm Regards,?
Vicki ?
The opinions expressed in this article should not be taken as financial advice, or a recommendation of any financial product. Vicki Kemp or Vega shall not be liable or responsible for any information, omissions, or errors present. I recommend seeking professional legal and/or mortgage advice for your own personal situation. My Disclosure Statement is available on request.