When it comes to debt management, one thing a lot of people have trouble with is the concept of debt vs investment. One reason for this might be the traditional terminology of bad debt and good debt. Certainly, this is a valid concept, but nowadays the term “debt” is just too encroached with negativity to be taken as anything but.
It’s just not really that easy for someone raised in today’s society to view “good debt” as anything but debt, and consequently something to be avoided. For that reason, rewiring your thinking to view what is traditionally seen as “good debt” as an “investment” can help substantially improve matters for you.
That said, you might still be wary of investments in this market. Everyone knows the stock market isn’t in the best of shape, and most other funds seem to be crumbling as well. So, what to do? Why not take out a loan? If this sounds contrary to reason, you’re still not thinking of the ways in which debt can be an investment.
When you take out a loan, the nature of the debt depends on what you spend the money on. Simply put, if you spend the money on something that will depreciate in value, such as a new car or a new computer, it’s debt. If, on the other hand, you spend that money on something that will appreciate in value, something that you could potentially resell later at a higher value (or use as collateral to improve credit), it’s an investment.
Buying one’s one home is one of the best investments that one can make, and luckily, right now is one of the most opportune times in the last few decades to make just such a purchase. Mortgages across the country are seeing all time low interest rates, and besides that, there are many tax credits being offered to first time home buyers that you stand to take advantage of if you strike now.
Ever wish you could have gotten in on the ground floor of a stock that was certain to skyrocket later on? Buying a house in today’s market is kind of like doing exactly that. At present, the nationwide average interest rate on a standard mortgage of 30 years with a fixed rate, sits at just 5.28 percent. This is the result of steady decreases over the last several years, and approaches an all-time low.
Thinking of relocating? Now’s as good a time as any for that as well, because interest rates can even dip below the already low national average as you move from state to state. For instance, Pennsylvania is currently sitting a few points below the national average, while Georgia offers one of the best opportunities in the country for a low 5.14 percent interest rate.
Managing your finances in this environment can be quite an ordeal, especially if you’re trying to rebuild your credit and savings by establishing “good debt”. However, even in the midst of the recession, there’s one market to be taken advantage of yet, and if you strike now, the benefits can change your life forever.Tags: mortgage rates
- Mortgage Modification Program Reports Higher Rate of Success The mortgage modification program has been under fire over the last few months because of the small number of people actually helped. That seems to be changing as the U.S. Treasury department reports that 947,000 people have seen their mortgage
- Which Mortgage Should I consider? A mortgage is a loan that is secured by real estate property. Should you fail to pay the mortgage, you might end up losing the property to cover your debts. If you are a homebuyer you may need a mortgage
- Mortgage Rates Have Once Again Fallen The financial situation for banks continues to be volatile, and the situation they face has caused them to reduce their mortgage rates again, for the sixth consecutive week. Now, the rates sit at their lowest level in over several months,
- Confused about mortgage rates? A mortgage is a sum of money which is borrowed from a bank or building society with the purpose of purchasing a properly. They money is paid back to the lender of a fixed period of time, alongside accrued interest. There
- Subprime Mortgage Mess Takes Toll on Investors The subprime mortgage mess is taking its toll on the nation's investors. Financial experts say that fixed income investors have seen their share of losses this year because of the precipitous decline in the subprime mortgage market. At the same