Thinking about buying a house but worried about your credit card debt? You’re not alone.
The housing market has changed a lot in recent years, making it both exciting and challenging for buyers.
Mortgage rates, once sky-high, are finally coming down, and home prices are leveling out as more houses become available.
But is it a smart move to buy a home when you’re already juggling credit card payments? Let’s break it down.
Why Waiting Might Be Smarter
Experts say if you’re carrying a lot of credit card debt, it might not be the right time to buy a house.
High-interest credit card payments can eat up your budget, leaving little room for a mortgage.
Falling behind on house payments could even lead to losing your home.
“If you’re dealing with high-interest debt, focus on paying it off first,” says financial planner Christopher Stroup.
Paying down debt improves your financial stability and boosts your credit score, which can help you qualify for better mortgage rates later.
Real estate expert Dottie Herman agrees: “Your mortgage options might be limited if you’re carrying too much debt.
Plus, your interest rate will likely be higher, making it harder to afford the house you want.”
When It Might Be Okay to Buy
If your credit card debt is manageable and your income is steady, buying a home could still work for you.
But you’ll need a plan. “Take a close look at your cash flow,” says financial planner Sue Gardiner.
“Set clear goals, like becoming debt-free in 24 months, and see if you can balance that with a mortgage payment.”
It’s all about finding a way to pay off your debt while making sure you can handle homeownership costs.
Tips to Tackle Debt First
Experts agree that paying off credit card debt should always be a priority.
Start by listing all your debts, including balances, interest rates, and minimum payments.
Then, use a strategy like the debt snowball (paying off small debts first) or debt avalanche (tackling high-interest debts first).
This will help you pay down debt faster and improve your credit score.
The Bottom Line
If you’re dreaming of buying a house, take a hard look at your finances.
Ask yourself: Why do I have this debt? If it came from an emergency, that’s different from overspending on things you don’t need.
Understanding your habits can help you decide if you’re ready for homeownership or if it’s better to wait and tackle your debt first.
Buying a home is a big step, so make sure you’re ready for it—financially and emotionally.