Fluctuating Debt Costs

 I’m Miriam Neff, and I’m Valerie Neff Hogan, with Wise Women Managing Money

M It’s tempting when rates on borrowing are low to take on unwise debt.  That lower mortgage rate, an arm that changes later, might tempt buying more housing than is wise.  That arm will float up, and up, and up. 

V Don’t count on income rising with the cost of that debt.  It’s true also for home equity loans.  Floating rates can be devastating, even causing home foreclosure.  Optimism is a good thing.  But believing you can pay that loan in a short time may not be realistic.  You need facts to support that optimism.

M First, avoid debt except for a home mortgage.  And then be frugal.  What are you earning, what have you saved? Romans 13: 8 Let no debt remain outstanding, except the continuing debt to love one another.