Getting your finances in order is an important step to purchasing a house. You will be asked a lot of questions about your income and current bills being paid. But knowing your finances is not as simple as knowing how much your new shirt from Nordy’s just cost you. More specifically, you will need to know more about your assets and liabilities. Assets can be categorized as anything that has the potential to be owned or have economic value. Any type of currency is considered to be an asset. Other examples of assets are real estate, a car, accounts receivable or other real property. You can have current assets, fixed assets, intangible assets or tangible assets. Intangible assets are not physical in nature, for example Consumer Real Estate Finance Company is considered an intangible asset. Assets are liabilities and owner’s equity. Financially speaking, a liability is “an obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets. When looking at the break down of liabilities there are current liabilities and long – term liabilities. Some examples of current liabilities are accounts, taxes or short – term obligations. Some examples of long – term liabilities are long term bonds, long term leases or long term product warranties. While these terms may be intimidating to hear, being knowledgeable is the first step to overcoming that fear! Discussing the whats and the hows with your licensed loan officer is the best place to start!