| There's little doubt that we're borrowing
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| | you usually spend $2.50 per day on little
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| more and there's also little doubt that
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| | things -- coffee, candy or whatever.
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| credit is one of the great conveniences
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| | Instead, you set the money aside in an
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| of modern life. That said, like
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| | account that pays 6 percent interest. The
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| Goldilocks you want to borrow the amount
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| | result? After 30 years there's almost
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| that's just right -- and no more.So
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| | $77,000 in your account.There are any
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| what's the right level of debt?The loan
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| | number of strategies to save money, but
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| qualification standards used by mortgage
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| | let me suggest a practical approach. Look
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| lenders are an important guideline. You
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| | at your debts. Pick the one with the
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| can typically get that old standby -- the
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| | lowest balance, say a small credit card
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| fixed-rate, 30 year mortgage -- if no
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| | that requires monthly payments of $25.
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| more than 28 percent of your gross
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| | Save and pay it off. Then identify the
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| monthly income goes for mortgage
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| | next remaining debt with the smallest
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| principal and interest, property taxes
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| | balance. You now have $25 a month extra
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| and property insurance (PITI). In
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| | that can be applied to the second
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| addition, as much as 36 percent of your
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| | obligation. Save and pay off the second
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| gross monthly income can go to regular
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| | debt. Maybe with the second obligation
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| monthly costs -- PITI plus car payments,
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| | you can save $50 a month. After the
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| credit card debt, school costs, etc. In
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| | second debt is repaid, you have an
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| addition, because they have more liberal
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| | additional $75 a month to attack the
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| qualification standards, you can often
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| | third debt.During this process there are
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| borrow more with other loan programs such
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| | other steps to take. Bring lunch to work.
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| as FHA, VA and adjustable-rate
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| | Have one car (hard in some areas, but not
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| financing.But no matter what type of
| |
| | impossible). Collect change at the end of
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| mortgage financing you consider, the real
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| | the day and deposit rolls of coins every
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| question should be not how much can you
| |
| | month or so. Eat out -- but not often.
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| borrow, but rather how much can you
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| | Stay away from credit cards. Avoid late
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| borrow comfortably. In other words,
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| | fees and maintain good credit by paying
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| financial sanity counts.Unfortunately the
| |
| | bills in full and on time.As this process
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| term "financial sanity" is an expression
| |
| | continues you'll notice several
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| without a definition. The economics that
| |
| | interesting results.First, borrowing for
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| work for the Webbers plainly may not work
| |
| | real estate becomes easy as debts decline
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| for the Johnsons. We each have different
| |
| | and qualification scores rise.Second,
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| incomes as well as different interests,
| |
| | better credit results in reduced interest
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| expenses and preferences. Given this
| |
| | rates that can save you big money. Save a
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| background one might ask: What makes
| |
| | half percent as a result of good credit
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| financial sense for me?The answer looks
| |
| | on a $300,000 mortgage and you'll cut
|
| like this: If you're living from paycheck
| |
| | costs in the first year of the loan by
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| to paycheck, if monthly costs are a
| |
| | nearly $1,500.Third, there's no tax on
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| burden, if savings are small or
| |
| | "savings."If you have $1,000 in credit
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| non-existent, if you do not have health
| |
| | card debt and auto costs each month, that
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| insurance then it's time to re-think debt
| |
| | money is available only after taxes are
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| burdens.The richest person I ever met,
| |
| | paid. To get that $1,000 in cash you may
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| someone who started with nothing and
| |
| | have to earn $1,300 or $1,400, depending
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| created jobs for more than 50,000 people,
| |
| | on your tax bracket and location. If you
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| once offered this advice: "The key to
| |
| | pay off your bills and don't have to pay
|
| financial success is saving, and nothing
| |
| | that $1,000 a month, Uncle Sam does not
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| is harder than saving that first $10,000.
| |
| | raise your taxes and you gain the
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| After that, it's easy."In other words,
| |
| | equivalent of a huge raise.When you speak
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| it's entirely possible to have a
| |
| | with lenders about your ability to
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| substantial salary and to fail the
| |
| | borrow, consider that with good credit
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| financial sanity test. The waiting rooms
| |
| | you likely can borrow as much as you need
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| in every bankruptcy court are filled with
| |
| | if not more. But also consider that as a
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| people who once had big incomes and
| |
| | matter of financial sanity you have a
|
| bigger debts. One day the numbers didn't
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| | personal obligation to save. If you can
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| work and away went the trophy houses and
| |
| | buy a home, pay general expenses and
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| the big cars.So how do you begin the
| |
| | still save 5 or 10 percent of your gross
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| savings process?The first step,
| |
| | monthly income, the odds are overwhelming
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| literally, is to open a savings account.
| |
| | that borrowing will not be an undue
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| The very nice people who provide checking
| |
| | burden now or in the
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| accounts and credit cards will also be
| |
| | future.----------------------------------
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| happy to hold your savings.The second
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| | -----------------------------------------
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| step is to go after every nickel and dime
| |
| | -----Peter G. Miller is a syndicated real
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| you can find.The economics of savings
| |
| | estate and personal finance columnist who
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| resemble gravity: Little pieces brought
| |
| | appears 70 newspapers.Search local
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| together in one place produce big
| |
| | mortgage lenders now!Go here for online
|
| results. Here's an example: Imagine that
| |
| | refinancing and second mortgage loans.
|
