Acquiring a house in the middle of a pandemic hasn’t been easy for hopeful homeowners. When mortgage companies started offering low-interest rates to eligible applicants, properties began selling fast. This increase in demand resulted in a hike in real estate prices. As if fewer properties on the market at an affordable rate weren’t enough, a weakened financial status prompted many Americans to put their dreams on hold.
The Financial Downfall
The pandemic created several money issues for Americans. These issues altered their financial status, making it harder to purchase a home.
- Dipping Into Savings – With many Americans out of work or working reduced hours, they had to use their savings to tide them over. Some were so hard up for cash that they started eating away at their down payment.
- Skipping Bills – When money gets tight, you have to make choices. For many people, this meant skipping unimportant bills to cover the bare necessities. However, missing payments resulted in late fees and poor credit ratings.
- Charging Credit Cards – Credit cards became a primary financial source for covering expenses their incomes no longer could. Balances got out of hand, payments were missed, and consequently, late fees piled up.
With no savings, no down payment, and ruined credit history, those that applied for low-interest mortgages got denied. They realized if there was any chance of them getting a home, they needed to turn things around. That’s where COVID Debt Consolidation comes in.
Credit Card Debt Consolidation
COVID Debt Consolidation is a financial agency that offers low-interest loans to consumers looking to consolidate high-interest credit cards. If approved, the consolidation loan lumps all your credit card payments into one account. It makes it a lot easier to pay, and the interest rates are lower, allowing consumers to pay down debts faster. American consumers who considered this route found that they were ready to start shopping for a new place within a few months.
Fresh Start To A New Home
While borrowers had to keep up with their monthly payments, debt consolidation loans made it easier for them to get back on the right track.
- Improved Credit History – One of the most obvious benefits of consolidating credit cards is the ability to improve your credit history. Your old credit card accounts stop reporting late payments and your consolidation loan reports your current payments. Eventually, the positive ratings help to improve scores.
- Lower Debt To Income Ratio – Taking on a mortgage is a huge financial obligation. If you already have too much debt on your plate, mortgage companies are less likely to approve your loan. If you’ve consolidated your debt and kept up with payments, this lowers your debt to income ratio, increasing your chances of approval.
- More Money – When you eliminate high-interest rates and reduce your monthly payments, this is money you can dedicate to other things. Consumers were able to get caught up on other bills they’d fallen behind on. Some were even able to dedicate the money back to savings to boost that nest egg.
- Better Financial Management – In order for debt consolidation loans to work, consumers have to be committed to being responsible. Determined to dig themselves out of the hole, many people did what it took to get back on track. They developed budgets, eliminated wasteful spending, and stuck to their guns when it came to repaying the consolidation loan. Developing better financial habits ultimately improved their credit history. It also showed mortgage companies that applicants could be responsible in difficult times.
With mortgages at an all-time low, lots of Americans considered the possibility of becoming homeowners. Unfortunately, the national pandemic caused many first-time homebuyer hopefuls’ financial status to decline. On the bright side, companies like COVID Debt Consolidation provided relief. Although not an overnight solution, when a debt consolidation loan is used appropriately, it can be the first step towards a fresh start. It wasn’t long before many people were able to secure a mortgage to acquire a property.