I have a lot to be grateful for today. Everything is starting to go in the direction I want it to, but still I worry. Life still depends on other people. I have to secure the family and the family business so that we are less dependent on others. People talk about money as a fence and that is what it is. It guards from the outside world and makes you less dependent on others.
The facts of the world are that we always depend on others. I just don’t like some of those others being banks. That is where I am now. The title for this house is now in my name, and I am grateful for that, but it means little unless I either sell the house or use it as collateral in a loan. Unlock the equity of the house and use it to turn bad debt into good debt. I just worry that the loan won’t be approved because of silly reasons.
Think about it. Someone is paying $1,000 in minimum payments on credit card debt, for example, and goes to the bank looking for a loan. The bank could offer them a loan where they pay $500 a month on the same debt but with a defined in term, lower interest rate, and obviously, lower monthly payments. The person is paying $1000 a month in this debt, but the bank refuses because their debt to income ratio is too high. The bank never looks at the fact that they have been paying $1000 every single month, and turning that payment into $500 would instantly lower the ratio.
The same goes for renters. A person can pay $2500 a month in rent for ten years and walk into the bank looking for a mortgage on a property that would carry the same in monthly payments in PITI and be turned down for the loan because the actual monthly payments a person makes don’t matter to underwriters.
It is a silly system and we depend too much on it. Debt is bought and sold every day in this country. It is one of the most valuable resources we have, and the people that need it are forced down paths that lead them to have too much bad debt and not enough good debt.
Hopefully when I walk into the bank I can get it over to them that I would like to clear my debt. Get it all washed away into a small mortgage on a valuable property in order to convert all that bad debt into good debt. Hopefully it isn’t too difficult and I can pull it off and have enough left over to get some assets and start producing more income.
David Huzzard Writes 