We are wanting to buy a house in about a year's time but want to get rid of some debt straight up. I can't help but feel like I'm missing out on a product or some smart advice! This is our situation, can anybody tell me the best thing for us to do in order for us to make the most of the year ahead getting out of debt and saving the deposit?
- My husband and I both work full-time (with 2 kids in daycare) earning an above average wage.
- Our debts include a car loan, a $10K credit card and a GE interest free card (which we are very good at keeping on top of)
- We have NO savings!
- We are in Australia
- We are NOT eligible for the first home owners grant.
- We have a St George account which includes an everyday account and a linked savings account (with 1 debit card)
- We have an ING savings account (no cards)
- We have recently refinanced our car loan.
Should we be consolidating our debts? Opening a special kind of an account?
Any advice would be greatly appreciated! Advertisements from finance companies or the like will NOT be appreciated!
Thank you!|||There's definitely no "product" that will save money for you. It's about spending less than you earn and restructuring your debts so they cost you as little as possible. It sounds like you're on top of the debt piece. Now you need to create a budget that includes your savings goals and cut back in every other category you can to sock away as much money as possible.
You mentioned that you don't have savings. That's a sign that buying a house should not be your first financial priority. It's critical to save up at least six month's worth of your living expenses in an emergency fund first--even before you pay down your debt. Without emergency savings you are extremely vulnerable from a financial perspective. Here are tips about how to save: http://moneygirl.quickanddirtytips.com/h鈥?/a>|||I suggest that you go to your local St George branch and talk to their home loan lender. At this stage, you will find it difficult to obtain a loan to buy a house because of your existing debts and not having any savings.
Talk to the lender, they may suggest that you consolidate your debts into a personal loan, which will usually have a lower interest rate than the credit cards. If they do, reduce the limit on your credit card to an amount that would cover you in an emergency and get rid of the GE card. Having these cards also impact on how much the bank will consider that you can repay on any loan they may give you.
Ask the lender, what they would be looking for you to have, to qualify for a home loan. St George also has a home loan, called Family Pledge, where if you have a relative willing to offer their property as security in addition to the house that you buy, you can obtain a home loan without having saved a deposit.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment