Home | Personal Advice | Personal Columnists | Situation Analysis
Situation Analysis
Strategy for using debt. Borrowing StrategySituation My husband and I are just starting out and are trying to be wise with our finances. Unlike many of our friends, we are lucky to not have any existing debts and pay off our credit cards every month. However, we know that we will ultimately need to borrow money for things like a car or to buy a home. What are some of the important things we should consider as we consider borrowing money? Suggestion The sensible use of debt should be part of any sound financial strategy. Debt can enable you to enjoy things that otherwise are beyond your current reach. Borrowing can also have its ugly side. Too much, too expensive or the wrong kinds of debt can make life miserable. The basics
The importance of a good credit record
Common sense borrowing habits
Getting help if needed Consider all the terms The "right mortgage" for you should balance interest rate, length, and down payment requirements that fit your situation. Adjustable rate mortgages usually have lower rates, but your payments may increase. Long-term mortgages usually lock a higher rate. If you expect to stay in one location only a few years, an adjustable rate mortgage may be best. If an increase in monthly payments would be too painful, look at a fixed rate mortgage or an adjustable one with rate adjustment limits. Prioritize borrowing based on long-term value
Summary Being conservative in your use of borrowing can help you take control of your financial future. Borrowing for the right reasons and living up to your repayment responsibilities can make borrowing a useful financial tool. |
||||||||
Read other situation analysis articles | ||||||||
|