If you want to buy a house fairly quickly (within 6 to 12 months), you’ll need to make sure your credit is reasonably good. If your credit needs some work, don’t panic. Today, Golden Hour Properties outlines the precise steps you’ll need to take to start saving.
Create a Budget
If your credit needs a lot of work, you might be feeling hopeless at this point. You have a car loan and a few credit cards. You’re already maxing out your credit card (or cards), and you’re only paying the minimum balance on your loans each month.
So, how are you going to buy a home? The good news is that there is hope! And one of the best ways to begin reducing your debt is by creating a budget. A budget can help you determine where you can cut back on spending, which will allow you to pay more toward your debt each month.
If you currently have two cars and you don’t need them both, try selling one of them or asking friends for rides until you pay off the car that’s left. If you can’t do without two cars, Chase advises talking to your bank about leasing an automobile so that it doesn’t become another financial burden.
Reduce Your Spending
You can reduce your spending by eating out less often and making similar sacrifices. Your $10 lunch may not seem like much when compared to the amount of money you spend on groceries each week, but consider how much time and effort goes into preparing those meals versus grabbing something quick from the restaurant down the street. The next time you feel hungry during the day, pack a lunch with yourself or whip up something at home instead of going out again – it could save you hundreds in just one year!
Creating a Debt Reduction Plan
Reducing your debt is a major undertaking and not something you should put off in favor of other tasks. You might be wondering where to start and what to do, but Money Management International points out that there are many different ways to reduce debt. The key is finding which approach will work best for you.
Moreover, it can be hard to know which debts are the most important to pay off first. The order of how you decide which debt is the most important to pay off will depend on your priorities.
Work With a Financial Advisor and Realtor
The best place to start is by talking to an expert financial advisor. If you’re working with a realtor, they may be able to point you in the direction of a reliable advisor. Your financial advisor will have the knowledge to make recommendations on which debts are most important and how much you need to pay off every month.
Are You a Business Owner? Consider an LLC
Consider forming a limited liability company if you want to be a business owner and own your own home at the same time. LLCs have many benefits, including a lower startup cost. An LLC is also more tax-efficient than other business structures. Formation services are often more affordable for those who don’t need an attorney to start an LLC in Oregon.
Additionally, you’ll have more flexibility and less paperwork. Keep in mind, however, that every state has its own laws and regulations regarding LLCs. You’ll need to do your homework to ensure you are compliant with your state’s laws.
If you want to purchase a home in the next year, it’s possible to repair your credit. Take steps to reduce spending and debt, create a budget, work with a financial advisor and realtor, and form an LLC if you’re a business owner to gain tax benefits.
Golden Hour Properties is in the business of creating win-win scenarios between buyers and sellers. When you’re ready for us to create one of these scenarios for you, be sure to get in touch by calling (503) 893-9107.