The world of finance can be overwhelming, especially when there are so many different forms of finance. From getting your first credit card to applying for a mortgage, there are complex and important details that most people can't possibly know about until they embark on the path towards their financial and lifestyle goals.
When it comes to personal finance, whether you're applying for loans, credit cards, mortgages or filling out tax forms, it's critical that you do your research and find professional resources you can rely on to answer your many questions.
The best way to source a reliable financial professional is to talk to your friends and family about who they deal with for their insurance, banking, mortgages and financial services. As with any business, word of mouth is still the primary way financial service institutions bring in new clients and you can bet that if a potential service provider like a mortgage broker, insurance agent or bank has a good reputation in your community it more than likely means that they are reliable and trustworthy. But, don't rely on word of mouth alone; make sure you do your research and look for the details that can make all the difference. Members of the Better Business Bureau, well-known brands, award winners and community stand-outs are all a good bet for earning your trust and your repeat business.
It can be scary to apply for a credit card when you don't fully understand what to look for. Not all cards are created equal, and you may not even qualify for the card or limit you want. When you apply for a credit card, make sure you understand what the interest rate is, what the terms of payment will be, and how you are held accountable for repaying the money. If you default on a payment or two, you could potentially damage your credit rating and impede your ability to qualify for loans, mortgages and other credit cards in the future.
Buying a house is an exciting milestone in life, but it takes a lot of jumping through hoops to secure a mortgage at a rate and schedule that works for you. A mortgage is essentially a loan against the value of the home you buy, and can take up to 30 years to repay. Until you repay that mortgage, the bank, not you, are the technical owners, so choose wisely when it comes to mortgages.
These days, mortgage brokers and banks are more likely to scrutinize your earnings, credit standing, down payment amount and other factors before they willingly provide their services. Prepare yourself by researching lending rates: fixed versus variable versus adjustable rates can be confusing, so do your research online, and ask your banker or broker as many questions as you need to feel comfortable with your knowledge.
In the end, the best way to approach your personal finances is with caution, research and the willingness to ask a lot of questions. Read on to find out more about your finance options and the best ways to get what you want out of your money.