Sharon Simmons' Blog
When dealing with mortgages, people erroneously believe that the smaller the mortgage taken out, the better for them. This article will clarify the reasons why even as daunting as it sounds, the larger and more prolonged the loan, the better.
People who apply for mortgages are those who want to own a house but don't have sufficient cash to buy one or those who need a large sum of money from a lender and use their house as collateral. These borrowers have an extended period to pay it back, and the length of time varies up to 30 years depending on the agreement between the two parties and the size of mortgage money-wise.
If the mortgage borrower is unable to pay after the stipulated time, the property is foreclosed and most probably sold so that the lender, which is usually the bank, is paid back for the loan. For this fear of not being able to pay back, borrowers tend to get smaller mortgages, but below are reasons why getting bigger mortgages may be better in the long run;
1. It gets easier
Over time, payment gets more manageable because the property value appreciates, and the borrower's income rises steadily while monthly mortgage payment remains the same especially if choosing a fixed-rate loan. Thus, as time goes on, the money to be paid gets less daunting and less significant in comparison to the borrower's inevitable financial growth over the years. In the beginning, it may be a struggle to make the payments. But, over time it gets easier.
2. Mortgage accords you the ability to invest more and quicker
Many people prefer long mortgages because that means that the monthly payment will be smaller and spread out over a longer time as opposed to short-term loans. It may be better to invest a more significant amount now to reap more productive rewards in the future as one can use the proceeds from the investment to pay up. This seemingly huge risk only encourages more and faster investments too. In the long run, bigger mortgages result in bigger monthly payments, but it may also result in greater wealth.
3. Mortgage: liquidity and flexibility
It is best not to listen to people who say that all that matters in mortgage loans is paying it off. Or, that it is a risky thing to do. Applying for a small mortgage loan with this mentality will not grant you flexibility. People who get small mortgage loans do not put into consideration all the other necessities toward which the money should go. Hence, one loses liquidity and control over access to one's money. Even though it would most likely appreciate in the long term, you are going to be handicapped in the short-term.
No matter what you decide, it is essential to understand that you must do what works the best for you both long term and short. Discuss with your personal financial consultant and real estate agent.
80 Fir St, Fairhaven, MA 02719
0 Fir St, Fairhaven, MA 02719
It is always a beautiful and joyous feeling when you make an offer for a home, and the seller accepts it. However, you shouldn’t be in haste to pay the seller yet. Don’t be tempted to cut corners either by neglecting professional home inspection services all in a bid to reduce cost. Skipping home inspection should never be made because it will save you lots of headaches later on.
1. More Bargaining Power
A professional home inspection should reveal faults, or perhaps potential issues with the house. Knowledge gives you more bargaining power to ask for repairs or better yet, a reduction in the house price as compensation. But without such a professional inspection, you negotiate blindly, and when the deal is sealed, you find yourself paying additional money on things you know nothing of in the future.
2. For Safety
Here is another valid reason why you shouldn’t skip a home inspection no matter the reason. Getting an inspection on your home provides you with peace of mind. The home inspector will check the house for carbon monoxide, mold, and radon. If any of these toxic or harmful substances are present, that is enough reason to pull out of the deal.
Most insurance companies require certificates like wind mitigation and four-point inspection before you can finally be insured. If home insurance is one of the things you plan to do, make sure a professional home inspection is done in other to get those necessary certificates.
4. Protecting the House
The core functions of a professional home inspector aren't only to discover faults, as many assume. They can also offer tips on how to keep the house safe. Having a report definitely will save you a lot of money in return.
5. Future Cost Forecast
Another excellent reason to not skip home inspection is the insights to the future. A good home inspector can determine how long the plumbing will last, and also, the duration of the heaters or coolers before they stop functioning. With this insight, you can plan and negotiate properly with your seller.
6. Illegal Additions or Installation
In every region, there are building codes and regulations to which homeowners must abide. Otherwise, it will have a drastically negative impact on insurance, taxes, usability and overall value of the house. Through home inspections, rooms, garages or basements completed illegally will be exposed.
The advantages of not skipping home inspection are tremendous. To save yourself from future headaches, spend on a professional home inspection today. There are lots of licensed home inspectors in your locality, hire one before closing that new house deal.