Is Choice a Good Thing When It Comes to Mortgages?

It is likely that during your lifetime you will spend more dollars for the place you are going to sleep than anything else. With that, the potential to lose your wealth unnecessarily because of decisions made surrounding your mortgage is very high. There is a great deal of misinformation and misconceptions concerning this topic, and often our decisions are made based on commonly accepted perceptions that are not necessarily correct.

There are so many options available it can be overwhelming to determine which option is best. It is no wonder that making the right choice can be very confusing, and it can be easy to doubt that you have made the right decision even after the choice has been made. Ask yourself this, if the mortgage lending institutions made the same amount on every mortgage option, how many options do you think there would be? Obviously, there would only be one. Since there are so many, it can be helpful to have someone on your side who is more knowledgeable about the subject to steer you clear of the pitfalls.

People tend to maintain different strictly held views about which mortgage is "best," and as a result, it can be difficult to have an open conversation about it. After all, nobody wants to hear that the decisions they have made might not have been the best ones. What's more is that you want to believe that these decisions were not made haphazardly, but with great care and effort. We make decisions based on the things we "know," which we also think are true. But what if what you "know" turns out not to be true?

To make my point, let's run through a fun little mental exercise and take the following true/false quiz:

1. A large down payment will save you more money over time than a small down payment, true or false?

2. A 15-year mortgage will save you more money over time than a 30-year mortgage, true or false?

3. Making extra principal payments saves you money, true or false?

4. The interest rate is the main factor in determining the cost of a mortgage, true or false?

5. You are more secure having your house paid off than financed 100%, true or false?

Chances are you answered these with a reasonable degree of certainty. However, if you have made mortgage decisions based on what you thought to be true, and it turns out that the answers are different than what you thought, you could be negatively impacting your wealth potential as a result without even knowing it. If what you thought to be true about mortgages turned out not to be true, when would you want to know?

Join me for my last presentation on the 26th at the Whitehall Library at 6 PM. We will cover home wealth and strategies to leverage debt. If you are unable to attend the presentation live, you can request a copy of the presentation slides at http://www.treasurestateadvisors.com. You will also be able to reach me directly as well with any questions.