Question

1. Discuss has home mortgage lending changed in the last 10 years. What are the key differences between borrowing in 2007 and today? Provide support from news articles.
2. Do you have a formal budget? Why/why not? What do you think are the reasons why people do not make formal budgets?
3. Should young couples with two incomes consider taking on much less debt than might otherwise be appropriate for their level of income? Explain.

Answer 1

1. Home mortgage lending has changed in 10 years because there has been high degree of regulation related to the mortgage market and high degree of credit worthiness checking in order to analyse the repayment ability of the debtors nowaday, whereas in 2000, there was a lackluster approach of various companies who were providing with mortgage loans and they where is going with substandard loans so now a days one will have to have a better repayment ability in order to have a Mortgage loan so that there is a lower risk associated with the default of the mortgage market.

2.yes I do have a formal budget because it will help me in tracking all the income and expenditure related to a certain period and it will also help in maintaining forecasting of the future needs of mine.

people generally do not make formal budget because they do not have that forecasting ability and they've also have been not consistent with budgetary advantage and they think it is a complex process.

3. Yes, two income generating young couples should be trying to take less amount of debt because it will be helping them in order to gain the financial independence and it will also help to have a high degree of flexibility regarding decision making in their hands and it will also help them to manage their expenditure and income in a better manner when they will have lesser amount of debt.