Buying a Home won’t Solve Your Debt Crisis
Want to get out of debt? Don’t call a realtor, call a certified credit counselor
(Fort Lauderdale, FL) – Taking on more debt in order to get out of debt? That doesn’t seem like the wisest choice. And yet, in a survey conducted by loanDepot.com, LLC (loanDepot), 25% of respondents chose owning a home over being debt free.
On the flip side, a study by Interest.com revealed that housing has become less affordable, especially for city dwellers. Average home prices increased by nearly 16% over the last year in the 25 largest cities, while incomes rose by only about 3%.
“In city after city, rising prices mean the house that a family with an average income can afford has shrunk,” says Mike Sante, managing editor of Interest.com. “In many, home ownership is largely out of reach of median-income households.”
The 25% who chose owning a home over becoming debt free concerns our credit counselors …
Always keep in mind that owning a home is not the American Dream anymore for millions of people — becoming debt free is the new dream, especially for the younger generations. And that’s actually a good thing! It’s more concerning that some people still don’t realize how debt can devastate not only their finances but their whole life.
At that’s something we know about. We’ve been helping people get out of debt for over 20 years and have seen experienced some real horror stories: From people losing all of their material positions — homes, cars — to the heartbreak of divorce because of money. Debt is the destroyer of dreams.
If you want to buy a home but you’re holding onto excess debt, the first thing to do is call a certified credit counselor, not a realtor. A credit counselor will:
- Provide a free comprehensive review of a person’s personal financial situation to find out what types of debt they have incurred
- Generate a budget analysis to find out where the money is being spent and how much money is available after all bills are paid
- Run a credit check to discover the person’s credit rating and to see if it’s been harmed by their financial hardships
- Review all debt relief options and provide a professional judgment on which option is best for that person
The key to debt relief: Face your debt and do something about it. Don’t accumulate more debt by purchasing a home – you could further damage your credit if you don’t make the mortgage payments on time.
Media Contact: April Lewis-Parks 954-377-9344 AParks@ConsolidatedCredit.org