Times In Life You Should And Shouldn’t Borrow To Buy
Borrowing money is a fact of life. You may meet people who treat borrowing money as something similar to a cardinal sin. But this is ridiculous and to prove that you only need to think about the times in life when you do need to borrow. You need to borrow to go to college, buy a house or really any item that is beyond your paycheck. How about when you get engaged? You are supposed to spend three times your monthly paycheck on that special ring that will signal a key change in your life and be a declaration of your lasting love. How do you do this if you don’t have the cash you need. The simple answer here is you can’t. You have to borrow. But that doesn’t mean that you should always borrow. So let’s look at some times when it’s the best course of action and a few others when it is the worst.
Borrowing For A Home
Don’t wait until you can afford to buy a home outright because you’ll be waiting all your life. Or, you’ll have to buy a home with so many problems that you would have been better taking out a loan anyway. It’s worth pointing out at this point that a mortgage is nothing more than a home loan. You don’t own the property, the loan company does, and you’ll be paying it off on a monthly basis slowly gaining a firmer grip on the property.
The trick when borrowing to buy a home is to borrow as little as possible. You can start by gathering as much money as you can for a deposit. Be aware that there are government incentives available that may be beneficial here. There are schemes where if you save so much, the government will add to your funds to encourage young buyers to jump on the property market. You can also look to borrow from family, and the benefit here is that they, hopefully, won’t charge you interest.
Do make sure that you use a mortgage broker here as well. Otherwise, you might not be able to access some of the better details that aren’t advertised to the public.
Home Repairs
Let’s say that you have a faulty boiler in your home. You’re probably going to want to repair it using a service like bunnings.com.au but if you don’t have the money, you might wait. You might build up your funds until the point where you won’t have to borrow any money to pay for it. This is a mistake because while you’re waiting and saving up funds the issue is almost definitely growing worse, slowly but surely becoming more expensive until ultimately you might need a replacement. If that happens, you could be looking at a bill of at least 10K, and you don’t want that.
Instead, you should borrow. With sites like brighterfinance.com.au, you can calculate loan repayments and make sure that you will be able to afford to pay it off at a reasonable level of interest. That way, you can get the repair that your home desperately needs and avoid getting into a loan that you can’t handle.
Buying A New Car
This is a little bit of tricky one because, in all seriousness, you shouldn’t be buying a new car at all as you can see on autoexpert.com.au. New cars are money drains and they will slowly, but surely bleed you dry. Now, a lot of people say, hang on a minute, buying a preowned car will cost you just as much? You’ll have to pay for repairs and fix issues to make sure it passes it’s MOT each year as soon as you purchase it. Well, that won’t be true if you find a great car on the market and they do exist. You just need to find a dealer. Now, you might still need to borrow a little cash to pay it off but it will be a much smaller amount, and you should have no issues handling a loan like this.
Getting To The Next Payday
Finally, you might be considering borrowing to get to your next payday. These loans are often easy to get, require no credit checks and come with insane levels of interest. You’re better off just using a credit card if you are low on money in a month. That way, you should be able to pay the cost off before the expense becomes completely unmanageable.
We hope you find this advice helpful and use it when deciding whether you should or shouldn’t borrow to buy.
