Thursday, April 23, 2009

Is A Mortgage A Good Or Bad Thing?

Are mortgages simply a trap? Many people have been burned by the real estate market and the corruption in this industry over the past several years. Should you even get a mortgage, or should you fear that if you do you'll face nightmares like foreclosure and losing your home?

Don't be afraid. Be smart. It's true that you can get taken advantage of and end up on the street (and taking a huge financial loss) if you are not careful. So the solution is not to give up entirely; the solution is to be cautious! Don't jump into a mortgage agreement you don't understand!

You see, that is what caused a lot of this mess. The reason so many people have lost their homes is two-fold. First of all, the economy and unemployment rates are both in very bad shape to date. This means that many people simply can't afford things like a mortgage.

The other issue that is causing people to lose homes is that they get into mortgage agreements and the interest rate fluctuates, goes through the roof, and then they cannot afford the monthly payments. Is this due to a deliberate booby-trap set up by mortgage companies? Perhaps.

On the other hand, when you sign a mortgage, this is a legally binding contractual agreement. You should never sign anything you don't completely understand or agree to, but especially not something with such a huge dollar value attached to it.

Face it: this is the biggest investment of your lifetime, this home you are financing! Do not take it lightly. Make sure you understand the mortgage before you sign. And don't be unrealistic about how much you can afford.

By: Roberto Bell

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