Personal Business Journal

To find out just what kind of financial shape you’re in, answer the questions in the following Financial Fitness Checklist.1 If you’re married, print this out and take it home so that you and your spouse can work together to answer the questions. Make a note of how many questions you answer yes to.

1. Are you using more and more of your income to pay your debts?
2. Do you make only the minimum payments due on your loans and credit cards each month?
3. Are you near, at, or over the credit limit on your credit cards?
4. Are you paying your bills with money intended for other things?
5. Are you borrowing money or using credit cards to pay for things you used to buy with cash?
6. Do you often pay your bills late?
7. Are you dipping into your savings to pay current bills?
8. Do you put off visits to the doctor or dentist because you can’t afford them?
9. Has a collection agency called recently about overdue bills?
10. Are you working overtime or holding a second job to make ends meet?
11. If you or your spouse lost your job, would you be in financial trouble right away?
12. Do you worry about money a lot?

If you answered “no” to all questions on the Financial Fitness Checklist, you’re the picture of financial health.

One or two “yes” answers, while not necessarily a sign of impending doom, can be a warning sign of potential problems. Before things get any worse, take time now to draw up a realistic budget (including a savings plan) or to revise your spending plan. Cut back on your use of credit cards, and watch closely for other signs of financial trouble.

Three to five “yes” answers could mean that you’re heading for financial trouble. It’s imperative that you get your spending under control right away. If you don’t have a monthly budget, draw one up and follow it. Put away your credit cards and cut out all unnecessary spending until you can answer “no” to all the questions on the Financial Fitness Checklist.

If you answered “yes” to more than five of the questions on the Financial Fitness Checklist, you may already be in serious financial trouble. But don’t despair. Financial counseling can start you on the road to financial recovery.

According to Carrier Reeder, debt adviser: The most important type of loan is home loan and as in other cases the choice of lenders are immense.  She analyses the various types of loans available and the options offered by them.  The various types of lenders are a. Mortgage Banker, b. Mortgage broker c. Credit Unions, d. Savings and Loans and e. Government Loans.

According to Reeder, in case of Mortgage Banker one person is responsible for the borrower from beginning to end, who guides through the various process of loan facilities, the various offers, choosing the loans which best suits one, the time period etc  he also follows on the repayment factors, interest involved and till the end when the loan is all paid up. A Mortgage Broker on the other hand is engaged when there is not a good credit history for a borrower, he acts as a mediator between the bank and the borrower and gets the entire process done. A Credit Union is present in many of the associations or groups, in case the borrower belongs to such association then he/she can check out the various loan facilities offered by them. The best bet for a borrower is the local savings and loans groups.  Government does not themselves offer loans but back some of the loans already in offering.

According to Kevin Stith, a debt adviser, financial institutions, banks and private lenders offer loans or mortgages.  The reason to approach a private lender is when the borrower has a bad credit rating.  The private lenders ask for security for the loans advanced by them.  The security is usually in the form of property or house.  The private lender here takes a risk by lending loan to someone who has a bad credit rating, hence to reduce his risk he asks for a higher fees and property as security.

The difference between applying for a loan online and through a broker is that the rates of interest are fixed in case of a online loan facility and in case of a broker the rate of interest can be negotiated and various facilities which suit the borrower can be offered by the broker.  It is said that in case of a mortgage broker, if a business deal is fixed and the lender seems to gain advantage then he may offer may facilities to the borrower.  Also according to Stith the market is full of borrowers and hence shopping around for one who offers better deal is definitely advantageous to the borrower.