Finances 101: 5 Steps to Becoming Debt-Free before Buying a House

Finances 101: 5 Steps to Becoming Debt-Free before Buying a House
  • Opening Intro -

    A new house is a major financial commitment, so it makes sense to improve your personal finances before you make a purchase.


Debt is a serious concern for many people. It can weigh down your budget, and it may impact your ability to obtain great loan terms for a new mortgage. However, paying off debts is rarely an easy task. These tips can help you to achieve your goal of being debt-free before making your purchase.

Adjust Your Spending Habits

If you have high debt balances, this may be a sign that your spending habits are excessive or unhealthy. For example, you may be using credit cards to support your lifestyle. Before you can focus on actively reducing debt balances, you must adjust your spending habits so that you stop relying on credit cards and other types of financing. Ideally, you will reduce your lifestyle so that you are living well below your means.

Always Pay More than the Minimum

Depending on your current outstanding debt balances, it could potentially take decades to pay the balances off in full if you only make the minimum payment and do not add onto the balances going forward. Focus on paying more than the minimum on your balances so that debt reduction occurs more rapidly. If you are able to reduce your spending habits more substantially, you will have even more money available for debt reduction payments.

Refinance Your Debt Strategically

High-interest rates create high-interest charges. These charges directly decrease the effectiveness of your payments at debt reduction. Refinancing high-interest rate debt into a lower interest rate program or account is a great idea. You can take advantage of zero-interest introductory credit card offers, an installment loan program or other debt consolidation methods. Having someone else take a look at your home loans is also a good idea.

Pay off the Lowest Balance First

Unless you are able to consolidate all of your outstanding debts into a single account, a smart idea is to pay off the lowest balance first. Rather than try to reduce all account balances at the same time, make the largest payment that you can comfortably afford to the account with the smallest balance. Once this account is paid in full, move onto the account with the next lowest balance.

Get a Second Job

If you are serious about paying off debt as soon as possible so that you can more comfortably buy a new home, consider getting a second job. There are many part-time options available to consider, including work-at-home jobs, ride-sharing driving and more. Use all of this extra income to pay debt balances off faster.

Regardless of how significant your debt situation is, rest assured that you can make excellent progress with debt reduction if you have the right plan. Each of these steps is essential in a smart debt reduction plan. As you customize a debt reduction plan to fit your circumstances, incorporate these steps in helpful ways.

Image Credit: Pixabay

helpful? … then please share it

Amazon Bestsellers: Debt and Home Purchase

Bestseller No. 1
USA ed. How to Own Your Home Years Sooner & Retire Debt Free
  • Harj Gill
  • Speed Equity® Publishing
  • Kindle Edition
Bestseller No. 2
I Will Teach You to Be Rich, Second Edition: No Guilt. No Excuses. No BS. Just a 6-Week Program That Works
77 Reviews
Bestseller No. 3
Taming The Monster Mortage
4 Reviews
Taming The Monster Mortage
  • Prime Video
  • English
Bestseller No. 4
  • Use the loyalty cards through the phone!
  • - Add your loyalty cards into the mobile simply by scanning the barcode on the plastic card.
  • - Get new loyalty cards by completing a few fields: First name, Last name.

Last update on 2020-03-20 / Affiliate links / Images from Amazon Product Advertising API


end of post idea


Helpful article? Leave us a quick comment below.
And please give this article a rating and/or share it within your social networks.

facebook linkedin pinterest

Amazon Affiliate Disclosure: is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to The commission earnings are used to defray our cost of operation.

View our FTC Disclosure for other affiliate information.

Categories: Debt Management

About Author

Krayton M Davis

From the administrative staff at We hope you enjoy this managing your money and finances BLOG-magazine. Please forward any suggestions or comments regarding the posting or other elements of our site. Thank you.