Some clients get a bit frustrated that minimum monthly credit card payments are counted against them in their debt ratios, even if they pay off their credit card bills every month. First, the underwriter can’t assume that the client pays them off every month. Second, if you are spending about $3,000 every month on your credit cards, for example, and usually pay that amount off every month, and the minimum monthly payments are $150 a month, it seems pretty fair if you are spending $3,000 a month to only count $150 a month against you in your debt ratios.
Many people measure things as a return on investment, or a percentage return. If someone said they had an investment to tell you about that would provide you a .5% return, you would not even listen. If someone said they had an investment to tell you about that would provide you a 4% return risk free, you would stop and hear them. A 4% return is an 8 fold return over a .5% return! And we all know that it seems hard to even impossible to get a decent return these days without taking on what many of us think is high risk. Investing in Read the rest of this entry »