What People in Debt Need to Know about Applying for a Loan
Are you buried up to your neck in debt ‐ or maybe just your waist? Many people who are carrying a large load of debt worry they will not be able to be approved for a home loan, but this is not always the case. Financing options may still be available to you even if you have debt. Here are some things to keep in mind.
Credit History and Balances
It boils down to this: credit matters. But thankfully, lenders only look hard at two aspects of credit, which include credit history and balances.
Lenders care about your credit history. If your history includes a long history of carrying large balances on a regular basis, it may not be a problem. If you are able to manage your debt and stay on track on payments, you may be okay.
Additionally, lenders want to see your credit balances and see evidence that you can reasonably pay off your credit card debt. If your asses are capable of covering your credit card balances, you are probably good to go. Lenders have a good system for doing this so if you are uncertain, do not hold back from applying for a loan based on a lack of understanding. It may be worth a shot.
Many people start saving for a down payment when they develop an interest in purchasing a home via loan. Unfortunately, many people who save up for a down payment return to their spending habits after they reach their target goal, making more use of credit cards.
The truth is, it is wise to avoid using your credit cards while applying for a loan ‐‐ even if you think you have great credit and that your debt is easily managed.
Looking to free yourself of debt and live a healthier, happier life? Visit Madison Monroe and Associates online today to learn about our stress relieving debt reduction programs!