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Personal Finances / Credit Cards and Consumer Debt


Subject:  Re: disbelief Date:  6/12/2001  8:57 AM
Author:  aja91 Number:  75760 of 312155

Just a little amusing story I wanted to share. I posted a while back about our happy dance. No more credit card debt. Anyway, my wife and I are just starting to think about the possibility of maybe, just maybe buying a house in the next couple years. So we are having fun once in a while by looking at houses and condos in the area. Last weekend, just by chance, we were talking to a lender at a condo complex. She wanted to give us an idea of how much money we could borrow. One of her information-gathering questions was "What is your total credit card debt?" When I replied "Zero", I'm pretty sure she didn't think we understood the question because she asked again about any credit cards over a balance of $500. I said, "Nope, no credit card debt". At that point, she looked at us like we were from another country or something ...but I had a smile from ear to ear. Not sure if she even believed us. And although my wife has been giving me a hard time for paying off the debt so quick, and not saving more, I think she finally understood...she was smiling too.

I had that problem too. No credit card debt, no student loans, one income, two kids, one car loan completely current on payments, another completely paid off, some money in the bank, not yet 30. . . I think he thought we must be in some kind of shady business venture or something!

That was the second funniest occurrence. The funniest was the first house about four years ago. Recently married. Banker read over our financial info, which while not bad wasn't quite what it is now (small CC debt, two car payments). Told us that at current rates he was preapproviing us for a $200,000 mortgage. We said, "Make it $120,000." Guy's jaw hit the floor. Why? He couldn't believe we wouldn't buy the biggest house "we could afford." He didn't know that we planned to turn into a one income, with kids household in a few years. So we'd figured out what we could "afford", on our own terms, on that one income. We wanted breathing room to get the credit cards and at least one car paid off quickly as well. A $200,000 mortgage just didn't fit into our plans, even if somebody said we could "afford" it.

That decision was one of the smartest financial moves we made. Income went up faster than expected, debt got paid off, retirement accounts got built up nicely, all because we avoided the temptation to buy what we could "afford."
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