Avoiding Mortgage Chaos

Posted on August 22 2007

$200,000 home loan for $425.00! You’ve seen the ads day and night offering you a ‘low mortgage payment’. The first question you need to ask yourself, ”Is that fact or fiction?” As the old saying goes – If it sounds too good to be true, it probably is.

As a housing counselor for Family Life Credit Services, I talk to many clients that are considering purchasing a home. One question I am always asked about is the “edgy” mortgage products. I remind them to be careful! It is really easy to get ‘taken’ when dreaming of home ownership.

The first step is to get empowered! Get some good homebuyer education. Try to stay away from education workshops held at banks or lending institutions as they often have their best interest in mind. A good place to find classes locally is a national non-profit organization called NeighborWorks. Go to http://www.nw.org for your local homebuyer education program and locate classes near you.

While in process of deciding if now is a good time to purchase a home be sure to understand the distinction between the many different types of mortgages. Be sure to ask your lender to explain the pro’s and con’s of each mortgage product available.

In my opinion the best and most consistent mortgage available is still the 30 year fixed mortgage. This means there are no surprises and one day, if you continue to pay your mortgage month after month, you will own your home. In my opinion, this is the best wealth building tool available.

In an age where you see ads everyday encouraging you to refinance or “buy now, this offer won’t last long”, it is important to take a step back and empower yourself. We have yet to work with an individual or family that has sat through our workshop who said they didn’t learn anything.

If you are considering purchasing your first home or your fifth home, please contact your local homebuyer educator. You won’t be disappointed.

Blair Hill – FLCS Homebuyer Educator