Low Interest Rates Offer Consumer Borrowing Opportunities

Low interest rates are providing a great opportunity for those consumers who can obtain a mortgage, either to buy a house or to refinance.  Corporations with healthy balance sheets are taking advantage of low rates, and for many people this behavior is worth emulating in their personal lives to the extent it is responsible.  This is especially true if one believes inflation will increase in future years.

Of course, not everybody can borrow because they do not have the income to support a loan, they have no equity in their house to serve as collateral, or their credit scores are too low.  And certainly banks have tightened their lending standards as well.

In the broader scheme, being able to take advantage of record low interest rates teaches several lessons:

Take advantage of whatever the economy and markets offer instead of complaining about the general bad situation.

Be prepared for when the overall situation changes.  That is, when times are good prepare for bad times, and when times are bad prepare for good times.

Don’t blindly follow the crowd and always consider risks (ask “what if?”).

What is right for one person is not necessarily right for another.

Lots of people wish they could redo their decisions prior to 2007.  Will people in a few years regret not taking advantage of low rates in 2012?

Source:  Companies Feast on Cheap Money

 

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