Saturday, May 21

Effective Ways to Get Debt Under Control Before Applying for a Mortgage

A sizable majority of homeowners would be unable to afford their respective residences without mortgages. So, if you’ll soon be purchasing your first home, it’s only natural that you’d want to do everything in your power to increase your chances of loan approval. Unsurprisingly, large amounts of outstanding debt generally don’t instill confidence in lenders. That being the case, it’s in every homebuyer’s best interest to get existing debt under control prior to applying for mortgages.

Stop Paying for Extraneous Sources of Entertainment 

Given how many subscriptions the average American has, it stands to reason that at least a few of them go largely unused. So, if you have a fair number of subscriptions to various streaming services, digital publications or print periodicals, now would be the time to take stock of how much use you’re getting out of them. 

For example, if you subscribe to a streaming service for the sole purpose of watching one show, what’s the sense in continuing to pay for a subscription when that show is between seasons? This is among the reasons a growing number of us have started to rotate streaming service subscriptions instead of pay for them indefinitely. Additionally, if streaming has become your primary source of television viewing, you’d do well to question the continued need for cable. Good cable packages generally don’t come cheap, and if the vast majority of entertainment you consume is available through streaming services, cutting the cord stands to save you a considerable sum each month. 

Furthermore, if you’re fond of purchasing books and other physical media, consider putting your library card to good use. Libraries can be fantastic places from which to borrow the latest books and movies free of charge – minus late fees, of course. Additionally, if your local library doesn’t currently have the item you’re looking for, there’s a good chance they’ll be happy to order it.    

Don’t Make Large Purchases on Credit 

The last thing you want to do before applying for a mortgage loan is accumulate more debt. So, if you absolutely need to make a large purchase in the leadup to submitting your application, avoid putting it on credit. In addition to adding to your outstanding debt, this may diminish your chances of loan approval. So, if a large purchase can be paid for in cash, it should be paid for in cash – at least for the time being. It may also be a good idea to simply hold off on making large purchases until the review of your application is complete. Paying down existing debt and abstaining from making large purchases on credit can be a boon to any Virginian looking to apply for a mortgage in Fairfax, VA.  

Find a Good Side Hustle 

Due to increased cost of living and worsening economic anxiety, a growing number of Americans are seeking out side hustles. So, if you have the stamina, bandwidth and inclination to take on another job, this can be a great way to build your savings – thus enabling you to get existing debt under control and make a large down payment on a house. 

If you have any special talents that can be put to marketable use, don’t hesitate to hop online and see what’s available – assuming, of course, that doing so doesn’t violate any employment contracts you’re currently bound by. For example, if you have a knack of writing, creating art, web design or coding, peruse job boards that specialize in freelance work for creatives. If you currently work a job with a fairly demanding schedule, take care to limit yourself to applying for freelance gigs that won’t interfere with your primary income source.  

For most homebuyers, a mortgage is crucial to the realization of their dreams of homeownership. If you’re unable to get approved for a manageable mortgage loan, there’s a good chance you’ll need to temporarily give up on making the jump from renter to homeowner. When looking for ways to make yourself an attractive borrower, you can’t go wrong with paying down outstanding debt. The more debt you have, the less likely lenders are to take a chance on you. With this in mind, take care to get a handle on your existing debt before submitting any mortgage applications.