I can't say I know too much about mortgages or buying a home, but I still wonder how people get themselves into foreclosure. I understand it when the breadwinner gets sick or dies or loses their job. But what about all these people who make a decent living and just signed up for a stupid mortgage.
A month or so ago I was getting my haircut and the hairdresser said that he signed for a ARM (Adjustable Rate Mortgage) after his daughter (the mortgage broker) told him it was a great deal and interests rates would certainly not raise for a long time.
Sure the man should've known better than to assume interests rate would stay at an all time low for 20-30 years, but his trusted kin told him otherwise, so he is now on the verge of screwed.
Surely not everyone is being told by family members to get these crazy mortgages? I wouldn't trust a mortgage broker or almost any financial adviser with my life savings, they all have a motive, if you don't think that you're foolish.
When I see excel spreadsheets full of hundreds and hundreds of foreclosures (and that's just for one area of the country) I do feel bad for some of them; some were so close to paying off their mortgage and then they miss a few payments and BOOM it's all gone. But another part of me is wondering how people can be so shortsighted.
So from my limited knowledge I leave you with some basic tips when buying a home.
-Put down the largest down payment as possible (don't end up getting mortgage insurance)
-Get a FIXED RATE loan
-Buy a home that is 20% (at least) less than what your mortgage broker tells you you can afford
Monday, January 7, 2008
From Riches to Rags
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I was amazed and upset that there are too many unscrupulous mortgage brokers who have taken advantage of people who want to be homeowners. I had the misfortunate of speaking to one of these sheister monkeys with regards to homeowner insurance. He asked me if I knew who he was? I said "no" who was he? He replied I'm the guy who can get you a $600,000 house with "no money down" I will finance the whole amount. I almost vomited in my mouth. I replied very smoothly that could'nt be a good idea, he wanted me to refer my customers to him, I replied they already had real mortgages that they could afford by the time they contact me, thank god! I feel sorry for people who fell for that guy's crapola, because they will lose everything to this louse.
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