Are you at a point in your life where you’re itching to buy your first home? Maybe you have a baby on the way and are looking to upgrade? Well, if you have debt in your life (I’m assuming you do if you are reading this article), you are probably wondering, should I pay off debt or save for a house? Continue reading to discover the answer.
Want better personal finances, but can’t seem to get out of your own way? Learn how with the 9 best personal finance habits to start now!
For most people, their home mortgage is by far the biggest expense each month and will end up being their biggest asset. Considering this, it should come as no surprise that when interest rates start dipping (especially when they’re at all time lows), people start looking into refinancing their home mortgage.
Although there can be many benefits to refinancing your home mortgage, it’s important to understand when to, why you should (and reasons you shouldn’t), and how to refinance your home mortgage.
Home Mortgage Refinancing Guide: Why, When, and How Read More »
Most people have learned and understand the basics behind building wealth: earn more than you spend, avoid debt, and invest.
Most people have learned and understand the basics behind building wealth: earn more than you spend, avoid debt, and invest.
However, many people either haven’t been taught or don’t recognize the common debt traps companies employ and once you’ve fallen into a debt trap, you quickly become a slave to the lender.
To help you avoid these common debt traps, I’ve listed them below along with some guidance on how to recognize and avoid them.
There are many different metrics you can use to determine how well you’re doing financially. One of the most effective for determining credit worthiness (and most commonly used by lending agencies) is the debt to income ratio or DTI ratio.
In a perfect world, the ideal debt to income ratio would be 0% (absolutely no debt).
However, for most of us, that’s not realistic as there are large expenses that we couldn’t fund in a reasonable amount of time without the use of credit. These include mortgages, small business loans, etc.
Just because we have access to credit and need it (arguably) for large purchases, you shouldn’t abuse it. Checking a few key metrics like your net worth and debt to income ratio can give you a quick snapshot of how you’re doing handling credit.
When it comes to the question “is it best to pay off debt or save?”, the answer is, it depends on your situation.
However, there are some guidelines you can follow to determine whether paying off debt or saving your hard-earned cash is the right choice for your situation.
