Has it become too easy to get a loan?
These days it seems to have become just so simple to get mortgages, home and secured loans, that a lot of people are going in for higher priced houses, just because their loan will be approved. That is a bit of a scary thing to do, I feel. The basic tenet of good budgeting is to stay within one’s means, but that seems to have become quite an out-dated concept these days.
While the process to get mortgages or home loans has being simplified which is a good thing, the amount of research done on each applicant should be more, to ascertain if the applicant can actually pay off the loan without defaulting on payments or going bankrupt. Banks probably need to do a more proactive job in getting people to understand the long term effect of these decisions. Remortgage decisions are usually made with greater understanding of one’s finances, which one can only gain with time and experience.