Bad Debts Vs Good Debts

What debts are bad debts? Can there be good debts at all? I know that the topic of this article can be confusing to some people. The decision whether certain debts would be described or categorised as bad debts or good debts will be taking out of accounting or business context. We are going to be looking at it in the perspective of personal finance. To accountants, bad debts will mean the debts which cannot be recovered from customers. But that is not the meaning we shall be focusing on. The debts here are not the amounts that other people Continue ReadingBad Debts Vs Good Debts

FHA Loan Requirements and How to Apply

FHA Loan provides a good option for low income home buyers who want to obtain mortgage loan but don’t have much money to pay for down payment.  The reason is that, FHA Loan does not only offer low down payment, the loans are insured by the Federal housing Administration. Prospective borrowers should understand that Federal housing Administration does not grant FHA Loans. What it does is to guarantee the payment of the loans made to homeowners through the approved lenders.  In this regard, borrowers will be required to pay Mortgage Insurance premium on their FHA Loan. This is what makes Continue ReadingFHA Loan Requirements and How to Apply

Significance of Debt to Equity Ratio

What is debt to equity ratio? Before I start discussing about the meaning and significance of debt to equity ratio, the best place to start is to define financial ratio. The reason is that, without having a basic knowledge of financial ratios, you may find it difficult to understand what the debt to equity ratio is all about. What is financial ratio? Financial ratios are the tools used in establishing relationship between a company’s financial information for the purpose of comparison. Financial ratios can be used to compare a company’s past performance or with the performance of other companies within Continue ReadingSignificance of Debt to Equity Ratio