When you want to buy a home and have the sufficient money to make the down payment but still wonder whether or not to make it or pay off your existing debt, here are a few questions which you should be asking to yourself and make the right decision. How much money can you save after making the down payment so that you can pay off your consumer debt? This will help you to avoid the sticky situation of having a mortgage loan along with other payment obligations. If you cannot think long term then you should start looking and considering shorter projections of five to seven years.
Best Use Of Money
The ley of this strategy is to make the best use of the money that you have in excess after making the desired amount of down payment for your house. You must be able to reduce your existing debts and also pay for your mortgage on time and manage your finance well. Therefore, it can be best done if you choose a mortgage with low down payment so that you have more money left to put toward your other consumer debts. So, you have to take that informed decision so that you can make the best use of your hard earned money.
It Is The Best Policy
Mortgage loans have a very long tenure sometimes lasting for even thirty to forty years. Therefore, the amount that you have to repay every month is quite low. Once you pay of one or two of your consumer debts with the saved money you can consider on making bigger payments to own your home.Therefore, it is the best policy to take a mortgage loan with less money down. This will help you to make bigger mortgage payments and also enjoy the tax benefit which is not given for other consumer debts. This will also give you an edge in the competitive market.
What You Owe Matters
For any mortgage company it is not what you pay that matters but they see what you currently owe to the market. Accordingly they calculate your eligibility for the loan and therefore, you must concentrate on investing your available cash in getting rid of your consumer obligations even if they are at zero per cent interest. It is the minimum payment made on each obligation that matters. You can check online to know all the facts and information about the eligibility for a home loan.
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Consider Your Income
At all times you must consider your regular cash inflow taking into consideration all your income sources like your employment, business interest if any, income from shares and dividends, part time jobs and much more. As home loans are long term secured loans, you must also consider all those extra bonuses and maturity benefits you would have in the future and plan accordingly for the repayment of your mortgage loan along with your other consumer obligations. Also make sure that your credit score is good enough to get the loan and the credit report does not contain any errors to drag down your credit score.