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How Do You Shrink Your Debt?

Let’s talk about two ways you can start to pay off your debt.

When you get serious about buying a house, you start looking at your finances more closely. You’ll figure out how much debt and income you really have. You’re going to have a lender who will tell you whether you qualify or not. All of this leads up to a question I get a lot: “How do I reduce my debt?”

The most basic answer is that you should reduce your spending and put that extra money toward paying down your debt. A lot of people talk about how to do this; I would highly recommend a Dave Ramsey course or book on this topic. However, there’s something else that often gets overlooked.

“You never know; they might just lower your debt.”

Once you’ve set up a budget and worked on your pay-down plan for a while, call the holders of your debt and negotiate with them. Someone on our team had his debt cut in half this way. He called the company and said he could pay his debt off in two months if they reduced it from $8,000 to $4,000. They said yes.

It is worth a call once you’ve gotten your spending under control and established a plan. They may ask about that plan, and if they see that you’ve been paying down your debt consistently, it will work in your favor. Have a conversation with them about what you can pay off in two months. You never know; they might just lower your debt.

If you have any questions about paying off your debt or real estate in general, feel free to call or email me. I would love to help.

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