Excess Debt
We've had a little break in this financing series and we are now ready to get back to "Overcoming Common Mortgage Financing Problems".
In this segment we will be discussing "Excess Debt". If you've been turned down for a mortgage loan because of excess debt or your debt-to-income ratio is too high, be grateful. The lender / bank has actually done you a favor! Over the long term, such debt is a serious pull on your ability to save money and live within your means with the income you have to work with. The end result is bankruptcy court for many who continue to climb into debt with the uncertainty that they will be able to repay it without the benefit of a "guideline."
Should you ever have the cash available to pay off your debt or at least some of your debt, I would encourage you to do so. Mortgage lenders sometimes make this a condition for funding the loan especially when you have significant debts or are at the borderline for qualifying for the loan. If you lack sufficient cash to pay down the debt and buy the type of home you desire, consider choosing among the following options:
1. Set your sights more realistically. Buy a less expensive home for which you can qualify.2. Go on a financial diet. Your best bet for getting rid of consumer debt is to take a hard look at your spending and see where you can make cuts. Use your savings to pay downt he debt. Explore boosting your income somehow. Maybe pick up a part-time job until you can pay down your debt load.
3. Get family help. A potential option is to have your family help you with borrowing, either by co-signing your loan or by lending to pay down the high interest rate debt. Again, I go back to being able to live within your means and using your family only as a last resort. If you cannot afford the home, now is possibly not the best time to buy.
In part four of our series we will be discussing Credit Scores. I hope this series is informative and helpful. Please call me with any questions you may have regarding financing or if you would like to see if you pre-qualify for a mortgage. You can email me by clicking on my name. JoAnn Young, Melbourne, Florida 321-243-4917
