Dumb down your personal debt

By the resi financial blog team, 03 October 2013

Simplify your personal debt

One of the most important factors to consider when applying for a home loan is your own personal debt. A substantial amount of personal debt can be a mark against your name and greatly influence the type of loan that you are able to secure.

So if you are thinking about applying for a fixed or variable home loan then you may want to have a look at your personal finances first.

There are a number of ways to dumb down your personal debt. Here are a few to help get you started.

Credit cards

Chop up that credit card of yours! Credit debt is so accessible to everyone that it can be extremely easy to fall into this trap. Obtaining a credit card, even with a $500 limit, can add to the debt against your name so it's best to pay this off as soon as possible.

If you would still like to have the capabilities of a credit card - for online shopping or international purchases - then you can use a debit card. This way, you will be using money that's in your account and reducing how much you're able to spend.

Avoid and reduce

Often, debt can come from having to pay for unexpected costs when you don't have enough cash to pay for them upfront. This could be costs such as major repairs to a car, or medical fees.

While these costs cannot be completely avoided, you can prepare yourself financially instead by having some small emergency savings.

Another way to dumb down your debts is to limit how much you take out through a mortgage. One of the ways that you can do this is saving up as much as you can to contribute to the purchase of your home. This will allow you to borrow less and save on how much interest you would be paying over time.

For advice on home loans and ways to reduce your personal debt contact a resi loan specialist today.

Categories: Home Loans