Question

Some people argue that individuals and families should never borrow and go into debt. After going through the materials for this chapter, do you agree? Why or why not? Be sure to make use of and reference to the course materials as much as possible.

Answer 1

When you're swiping your card or signing loan papers, debt sounds free, but this is an illusion. You pay a fee, in general, for the debt you make. In the type of interest, the price comes. The higher the interest rate, the more your mortgage would end up being paid off. Also, the more it takes you to pay off, the more interest you pay, the higher your debt load. Whenever you take out a loan or charge your credit card on something, you borrow the money you expect to receive in the future. Would you want to waste your money paying for things that you've always used up and no longer get a lot of value from? You never know what shifts in your income could happen, so it's best not to borrow your future.

When you file for a home loan , credit card, vehicle, and student loan loans are all considered. You can get turned down for a home loan if the other debt payments are too high. In most situations, if you hope to receive a mortgage, your gross monthly interest payments can't eat up more than 43 percent of your income. Some creditors like the amount much smaller. Which means that once you pay off some of your other debt, you will be left renting or paying on your new mortgage. When you have debt, it's hard not to think about how you're going to make your payments or how you're going to keep from taking on more debt to make ends meet. Debt stress can result in moderate to serious health issues, including ulcers, migraines, nausea, and even heart attacks. The lower you fall into debt, the more likely you are to be faced with health problems.