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Category Archive for Mortgage
Mortgage Brokers
Here we have a category of persons I don’t trust. The mortgage brokers.
Would you trust a person to give you the best solution for yourself when this solution is the one that brings him the smallest commission? I wouldn’t. Mortgage brokers are this category of people. In theory, you go to them, tell them what you want and they recommends you the best option. You think the best option is YOUR best option, but is NOT.
Mortgage brokers will recommend you what brings them the higher commission. They are not stupid to recommend what is best for you and so they could win several hundreds dollars, when they could fool you choose a variant that will bring them thousands.
So be careful.
Also, mortgage brokers are focused on closing the deal. They do not care about your particullary situation. That you could go out of job, out of money. They are interested ONLY in their pay. So, it’s better to talk with some friends, to get the advices from them, tehn from these sharks - mortgage brokers.
What is a mortgage
In case u have wondered what is a mortgage, here is my definition for it.
MORTGAGE = a way to sell your future to the banks.
This come for a guy that has, as we speak, 6 loans and 5 mortgages :) So, for sure i know what is a mortgage.
40 year mortgage
Do you need a 40 year mortgage?
Hahaha. 40 year mortgage? Do you really think that you will live that long? :)
Ok, let me tell you my opinion on mortgages on long period. 40 year mortgage, 30, or above this period :)
First, it really helps to go for a long period, because you have smaller monthly payments.
Especially if you are in your early 20s, it helps to kick start your life. Make your calculations, have an optimistic scenario, a pessimistic one and an extra pessimistic scenario :). And, if it sounds ok, go for it.
However, you must be aware that in the first years you are paying only interest, and no capital. So, if you can take a 40 year mortgage, be careful, because, on long run, it will cost you like hell. And do you thing the property you are buying it, in 40 years it will cost more then double? Francly, I doubt. Because houses, especially the american ones, are made of wood. So termites, weather, bad mantainance deteriorates the house. And in 40 years, the product lifetime is almost ended. Also, if you get a depression like this one, when prices are falling, it means you will lose tons of money. Or you live in a future chicago area, that will be hard hit by a recession. You can call you threw away money
A 40 year mortgage shold be repayed as soon as possible. Even after 3-5 years. This way, you will save tones of money, that otherwise will be spend for nothing. And also check the commision to reimburse in advance the credit. Also the contractual conditions… Otherwise you can have some nasty suprises. 40 year old mortgage could be an interesting and usefull tool, if you use it wisely.
