Our society has become very reliant on credit and debt. Who even pays for things with cash anymore? This obsession combined with the desire to get ahead and have more has led to a national crisis.
The debt in this nation, from the guy next door to our own government is astounding. Our country at every level needs to stop borrowing from the future. Otherwise, there will be no future.
A perfect example is this mortgage mess. Aggressive lenders over the past couple of years helped create the disaster we are now experiencing. But you can’t blame it on the banks alone, the willingness of individuals to borrow more than they reasonably could afford has also led to this pickle.
Foreclosures are at an all time high. Why? Because people were borrowing against the equity in their homes. Sounds reasonable, but really… the housing market was at an all time high… there were warning signs that the bubble may burst. Still, many people were taking second loans, lines of credit and refinancing up to 80 to 90 percent of their homes appraised value. Then the bubble did burst, and now these same people had no equity left in their homes.
In addition, the desire to have more for less led many people to borrow with adjustable rates. As these rates grew and the housing market crumbled, there was no way to make their mortgage payments. Then, when the bank threatened to foreclose, the house was no longer even worth what the homeowner had on loan.
I can remember in the past strong warnings about borrowing against your home. What were these individuals using the money for? Was it worth losing their home?
My hope is that this experience will be a lesson to the people and politicians in our nation. Stop this credit addiction and start to learn to live within our means.
Related Articles:
*Tips for Avoiding Foreclosure
*5 Ways to Use Your Home Equity Line of Credit
*Change Your Thinking, Change Your Debt Status: A Lesson in Needs vs. Wants