Money Info
Mortgage guide for everyone
If you own or want to own real estate, you need to understand mortgages.
For most of us, the mortgage field is jammed with jargon
and fraught with fiscal pitfalls. Choose the wrong mortgage and you could
end up squandering money better saved for important financial goals such
as higher education for your adorable little gremlins or your very own retirement.
For typical homeowners, the monthly mortgage payment is
either their largest or, after income taxes, second largest expense item.
When you're shopping for a mortgage, you could easily waste many hours
of your time in addition to the financial losses suffered in not getting the best loan that you can.
What is the first thing most people think about when looking for a mortgage?
The interest rate. And that makes sense, because no one wants to pay more for a
mortgage than necessary. But interest rates should only be the first point to
consider when shopping for a mortgage, never the last feature.
If rates are all the same, is there more to a mortgage than interest rates? Yes. Not all mortgages are created equal.
Mortgage packages vary significantly from lender to lender, with no two lenders offering identical packages of features
and options. With no real difference in rates, these other distinguishing factors must be carefully considered when
booking a mortgage loan. The similarity of interest rates is surpassed only by the diversity of the features available today.
More and more new products are available to residential mortgage borrowers than ever before. With so much variety to
choose from, you can find the selection process increasingly confusing and difficult. Which features are good and which
ones are not? Which options will truly save borrowers money, and which ones benefit lenders? While a certain idea may not
be too helpful today, remember that it could be important (and save considerable money) in the not-too-distant future.
Understandably, every lender promotes its mortgage package as "the best for the borrower." Yet with the large amounts of
money involved today, borrowers can't afford to make a mistake, or they may later become disenchanted with what the
mortgage offers. These four things are most important:
- Look for a mortgage that offers the most liberalized
prepayment privileges available.
- Look for options and features that provide the maximum in flexibility, whether renewing the loan or selling the house.
- Look for a mortgage that offers the lowest possible interest costs, with the fewest hidden charges.
- Look for a lender whose package best reflects your unique circumstances.
In other words, mortgage borrowers must become educated consumers, and then diligently shop for those
features which make up the perfect mortgage. If you're going to play the game, you've got to know the rules.
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