Now is the Time

I always finish each article with a reminder that you should know a mortgage advisor who knows and in the best case scenario even lives in your region; however, this month I am encouraging my readers to know their high-interest debt first. High-interest debt, such as credit-card balances or auto loans, is going to get more expensive because of the Federal Reserve’s recently increased interest rates.

It is often that I say when working to advise a person or a family that it works best to begin with the end goal in mind. All debts have an impact on the mortgage process. Even with the Fed signaling that it will be increasing interest rates again this coming year, financing a home is the one area of buying that still makes sense for most people. A mortgage advisor can help you to pencil out the expenditure.

As a mortgage advisor and before the Federal Reserve puts out six rate increases, the first thing in the interest of keeping your mortgage affordable and possible with other debts, is to pay down any high-interest debt as much as is possible. You should know that you don’t have to have the debt paid down to begin working with your mortgage advisor. You can meet with your mortgage advisor to develop a plan, but if you are the kind that wants to begin today, here are a few tips to help.

START TODAY
Making a connection to the pride one has in owning a home to the pride necessary to develop a plan to pay off high-interest loans is associated with effort. As you are dealing with debt now, you will most likely also work to figure out how to cut out a few extra expenditures that will ultimately help you get into the home you buy. Visualizing being in that home will allow you to have a sense of relief of the debt that will be gone.

REFINANCE DEBT
Working with an advisor early can help you determine whether it’s worth the money to make a change with some debt. Sometimes, it’s just a matter of refinancing variable interest rate debt into a fixed rate. When you have a fixed rate, you will know the exact monthly payment to expect even if interest rates go up. Making a decision to refinance depends mostly on your financial situation as well as the goal for getting a mortgage. Sometimes simply consolidating a pile of credit card debt resolves monthly payments. Or if you get a zero percent balance transfer offer, it might be an opportunity to save hundreds of dollars in interest payments depending on how much you owe. Some balance transfer offers come with a fee but it can be worth the cost as long as you are disciplined to paying the money during the offer timeline.

KNOW THE DEBT YOU HAVE
Making a list and knowing exactly the total amount of debt you owe is a great way to begin. Creating a spreadsheet that allows you to physically see your payments and how much the balance goes down gives us a greater ability to accomplish our goals.

MAKE A PLAN NOW
As always, be sure to find a licensed advisor that you know is familiar with your region, who serves your best interests, your community, and has history in the community as well as will be there for you for the duration. Call 360-607- 9312 or email  Pattullo@FinanceOfAmerica.com for help achieving your home ownership goals and to find your best mortgage options.

We have the answers that frame the decisions about how to get into the home you want. We are your local advisor.

We lend where we live,
Mike