It is not impossible to buy a house even if you are in debt. There are many ways when you can own a home and stop paying rent and start paying the amount for your mortgage instead. Being in debt is not an unnatural, but if you plan a little bit strategically, then the amount that goes toward the monthly bills can be enough to get a mortgage. For this, the most effective solution is to consolidate your debts, including credit card payments. The effect of it is many as it will reduce your monthly payments; improve your debt to income ratio and make your borrowing power strong.
Small Down Payment Required
When you want to buy a house, it is also wrong to think that you have to pay a lot of money as down payment. The down payment required to buy a house has come down drastically in the recent past. But the amount of down payment determines the rate of interest. The more you pay down, the less you have to pay every month as your rate of interest will be low. You can arrange the money for down payment by taking a loan from your retirement plan or some other sources, but for this, you have to be sure that you will have enough funds to deal with all the loans.
Convince Your Family
Now since down payment is a prime factor to decide the amount which you will have to pay every month towards your mortgage, you must try hard to increase it as much as you can. You can talk to your friends and family members to lend you some money or even ask it as a gift! Remember, banks are very particular about the source of down payment. If they find out somehow that the down payment is borrowed, the odds are high that they will decline from granting you the money to buy a house.
Other Way To Follow
You must plan well ahead to dream big. If you are in debt and are within the middle age group, you can start with buying a modest and small house on loan. Work extensively and try to earn more to pay the debt off in the shortest possible time. While you live there for a short time, cut down all unnecessary expenses to save more and create a fund to repay all your other debts. Once you have paid them off successfully, even by loan consolidation, you can avail a mortgage loan with your improved credit score. Now to pay more as down payment, you can sell off the existing one and move on to your next bigger house.
Control Your Emotions
The most important thing to buy a house while you are in debt is to control your emotions and have patience. Even if you have created a sufficient budget, paid off your debt, improved your credit score, it is easy to blow it up if your emotions rule you. Do not jump in to buy the first house you see in your neighborhood. Wait for the perfect house which is best suited for you and then go for buying, even if you have to wait for some time.