Should I Buy A House When I’m In Debt?

Should I Buy A House When I’m In Debt?

If you are considering purchasing a home but are currently in debt, you may be thinking “Should I Buy A House When I’m in Debt?” Well we are here to help. In this article, we will be discussing whether or not it is a good idea to purchase a home while in debt. Now, debt can vary from student loans, car payments etc, so you do not need to worry if it will be possible, because it is. Moreover, these loans can take years to clear and should not hinder you from purchasing a home. Here is a list of advantages and disadvantages that can help you come to a decision:

Advantage 1:

You can build Home Equity:

Firstly, purchasing a home allows you to build on your home equity. Home equity is simply, the value of your home in the current market. Additionally, properties are appreciating assets, therefore, the longer you own the home, you are building it’s home equity. Moreover, home equity is important because it allows you have a big asset that will accumulate a lot of value overtime.

Disadvantage 1:

Some Mortgage Lenders May Not Approve Your Loan:

Before approving your loan, mortgage lenders generally do their research on previous loan history. Therefore, if they discover that you have not cleared outstanding loans, they may be skeptical about approving a loan regarding a house. However, some lenders may approve but, it will most likely not be as much as you expect/want.

Advantage 2:

Low Interest Rates:

Although, some lenders may not grant you a large sum of money, it could be beneficial for you. The reason being, the smaller the loan, the lower the interest rate. Therefore, you will be able to own a home and not suffer high mortgage payments.

Disadvantage 2:

You may become house poor:

Lastly, this does not apply to every individual, however you may become house poor. House poor simply means you are unable to run the house efficiently. The reason being, having many debts and running a house can mean you will lack in some areas.

 

 

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