Home gambling commission Credit card debt discourages home buyers. Here’s how to pay yours...

Credit card debt discourages home buyers. Here’s how to pay yours fast

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Are your credit card balances preventing you from becoming a homeowner?


Key points

  • A recent survey reveals that credit card debt is a major factor in buying – or not – of a house.
  • If you have a balance on your credit cards, you can take steps to eliminate it as soon as possible.

Buying a home is a huge undertaking – and that requires advance of a significant financial investment in the form of a deposit. Buying a home also means committing to an ongoing mortgage payment, as well as taking on peripheral expenses like taxes, insurance, maintenance and repairs.

It’s natural to want to approach homeownership with a clean financial slate. If you owe money on your credit cards, you may want to delay buying a home until the debt is gone.

In a recent survey Per Rocket Homes, 46% of first time home buyers say credit card debt has hindered their home buying efforts a lot, while 36% say hindered them moderately or somewhat. Here are three steps you can take to get rid of credit card debt – and move forward with your dreams of buying a place of your own.

1. Get a side job to boost your income

If you owe money on your credit cards, there’s probably a reason why. After all, if you had the funds to settle your balances, you would. That’s why getting a second job could be a smart bet.

The beauty of a work aside is that your income that will not be awarded to existing bills early, since this money will be added. You should be able to use your income added to erode your credit card debt. And if you win enough money on the side, that debt could disappear quickly.

2. Consolidate your debts with a balance transfer

Less interest you run on your credit card debt, the more it should be easy to repay. This is why you may want to consider a balance transfer, especially if you qualify for an offer that allows you to transfer your various balances to a new card with an APR of 0% launch.

Of course, a balance transfer is not an option that you are guaranteed to take advantage of. To qualify, you will need a decent credit score. But you’ll also need a good enough credit score to qualify for a mortgage, it’s worth seeing if that option is on the table for you.

3. Use a personal loan to pay off your debt for less

A personal loan allows you to borrow money for any purpose, and you’ll generally pay much less interest on a personal loan than you would on a credit card. It might be beneficial to take out a personal loan equal to your total credit card debt, pay off your cards with it, and then reduce your personal loan with its lower interest rate.

When you owe money on your credit cards, more debt in the form of mortgage can seem daunting. And having a large amount of credit card debt could easily be a barrier to obtaining a mortgage in the first place.

If you really want to buy a house, do your part to free up more money for debt repayment and see if you can consolidate your debt in a way that makes it more affordable. This could be your ticket to achieving a major objective while improving your financial situation.

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