Before you take out any loan - especially a mortgage, you should have a cash reserve already established. Most lenders require a 2 to 6 month reserve.
No one knows when there may be an accident, a loss of a job - especially in today's economy, health issues, or another unfortunate event. You need to establish a cushion so that you can offset any decline in income should it happen.
If you are taking out a new loan to cover your expenses until the next pay check, like a pay day loan, you are in serious trouble. Before you incur any debt, set aside a sufficient cushion that can be readily accessed in case trouble arises.
If you start missing payments on your mortgage, car loan, or credit cards, you can watch your credit score tank faster than the Titanic.
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