If you are thinking of buying a home, you may be interested in a mortgage qualifier in order to determine if you have a good chance of qualifying for a mortgage. In addition, a mortgage qualifier may help you learn about your current financial standing, as having large amounts of debts may poorly affect your credit score, which will also reduce your chances of qualifying for a mortgage.
In truth, the best way to reduce your debts is to be proactive about how you manage your money. In other words, you should create a sound and realistic financial strategy, which includes avoiding impulse purchases that you will later regret. Here, we will delve into some easy steps that will help you avoid the accumulation of insurmountable debts.
Steer Clear of Impulse Buying
Many people look for immediate gratification, and will often buy things that they don’t need or even want. As such, try and avoid impulse buying, and only use your credit cards for emergencies, such as medical expenses, instead of using them to buy everyday items.
You should also not allow student loans and car loans to threaten your financial well-being. Unfortunately, North Americans have over $1.3 trillion in student loans, $1.2 trillion in car loans, and over $8.5 trillion in mortgage payments.
As such, inadequate resources coupled with unpaid bills will often force many people to declare bankruptcy, which will destroy their credit rating and make it nearly impossible for them to own anything of value in the future.
Take a Proactive Approach
In order to avoid insurmountable debts, you should try and make the most of your time and money. By doing so, you will increase your chances of maintaining a steady job, which will ensure that you have a stable income that will boost your financial confidence and allow you to make wiser financial decisions going forward.
For instance, instead of going directly into college without a job to help pay off your loans, you can take some time off from school in order to save up enough money. That way, you do not even need to take out a loan to pay for your college education.
Or, you can try and launch a small side business that can provide you with a secondary source of income. This money can go towards purchasing a car or going on a vacation without having to lease or use credit cards.
Another option for those looking to pursue higher education is to join the military, as doing so may allow them to defray many of their academic costs. They may also be able to benefit from the military services of their parents.
In sum, there are many steps that you can take to help reduce your risk of falling into debt. For instance, spend cash whenever possible instead of relying on credit cards or loans. Also, create a discretionary emergency fund that should equate to roughly six months worth of funds in the event of lost employment or an accident. If you would like to use our mortgage qualifier to help determine where you stand financially, then please visit Northwood Mortgage™ on our website.