Pay off debt to afford a Providence home.Whether you’re planning a Providence home purchase or trying to figure out your retirement, debt can be a problem. Too much debt makes it hard or impossible to save up for a down payment on Providence real estate, to put funds in a retirement account, and to feel confident about your financial health in general. The first step you can make toward getting control of your finances is to make a budget. You can do this the old fashioned way with a ledger book and a pencil. Or you can go high tech with all sorts of programs and apps. It doesn’t really matter how you do it. Just pick something you can stick with. If you’ve never made a budget, you might want to take a couple of months to just monitor how you spend. You might find you can easily make some cuts in spending.

Make a Budget and Plan to Save up for the Down Payment on Providence Real Estate

Once you have a reasonable budget, try to start a “debt pay down snowball”, as some experts call it. Start with the credit card with the highest interest rate. Pay it off as quickly as you can. Then take the amount you’ve been paying and put it to the next debt with the next highest interest. You should also refrain from putting more purchases on the cards once they’re paid off or while you’re working on paying them down.

Why is it so important to get your debt to a manageable level before buying a Providence home? For one thing, you’ll improve your credit score when you have a low debt to income ratio. A higher credit score means more favorable mortgage terms, which will save you thousands of dollars over the life of the loan. Also, the less you have to spend on credit cards, car payments, and student loans, the more you will have to save for the down payment. On the other hand, if you’re looking at retirement, less debt means more to put into your retirement account. Many people see their home as an investment for their retirement, too. When it’s time to sell, the more equity you have in your house, the bigger the profit you will make.

If you’re looking to buy a first home or downsize, give us a call! We’d be happy to talk about your needs and help you come up with a plan to find the right house.