Have you ever seen HGTV’s “My First Place”?
It’s about first-time home buyers looking for the perfect place to call their own, within a set budget.
I’m always amazed by how seemingly transparent they are with their finances. I’ve seen a few episodes where the buyers freely divulged how bad their credit scores were as a justification as to why their budget for house hunting was so low. Another episode followed a guy as he tried to repair his credit while house hunting. The show documented the jockeying he did with lenders as he waited for his score to improve with the hope of qualifying for a higher loan.
When you are drowning in debt, purchasing a house is probably not such a wise move. In fact, in most cases, it is downright impossible.
Your first move should be to eliminate your debt; if you don’t have the means to hire a financial planner to help you through the process, consider alternative options. For example, if the bulk of your debt is derived from student loans, it may behoove you to look into government sponsored or backed debt consolidation loans specially designed for student loans. If you qualify, you may be able to consolidate all your student loans into one payment. While the government won’t erase your debt, the consolidation loan will allow you to group all of your school-related expenses, so you pay a single, reasonable fee for a set amount of time instead of multiple loans that have different interest rates.
The government also offers help to military personnel and veterans who are in financial distress. One of the most popular government backed consolidation loans is the VA Debt consolidation loan. Administered by the Department of Veterans Affairs, the program is available to current and retired members of the Armed Forces. If you own a home you may be able to transfer your current bank loan to a much more affordable VA loan. The money you save paying interest or removing equity from the initial loan can be used to pay down credit card or other existing debts.