Money Smarts and Mortgages...

Money Smarts and Mortgages...

April 7th, 2008

"You've got to ask your self one question: 'Do I feel lucky?' Well, do ya punk?" Dirty Harry,  1971

Jim and Janet have no children and they still struggle at age 40-something to save and invest enough to secure their financial future. They were presented with the opportunity to buy their first home three years ago by one of Jim's friends who was in the mortgage business.

They were convinced that it was a deal that could not lose;

• no money down
• low monthly payments for two years
• extra cash at closing to pay off some credit card debt and, most of all,
• the assurance by the mortgage seller that the worst that could happen if the payments got too burdensome would be that the house would have appreciated in value and could be sold for a profit.

Jim and Janet were feeling lucky. They took the deal. Today the house is worth less than they paid for it, the payments are unaffordable, the credit cards are maxed out again and selling the house in a neighborhood where over 40% of the homes are already in foreclosure is nearly impossible.

Jim and Janet have an alternative that most don't have. They have no children. Because of that Jim and Janet are both seeking part time work to supplement their income and to avoid foreclosure and probable bankruptcy. Not a pleasant situation.

The Behemoths and their minions have convinced millions of Americans that owning a home at any cost is worthwhile.

BUNK!

Had Jim and Janet adopted the principles and practices of Money for Life, they would not have prematurely bought the house. They would have started a "bank," paid off their debt and saved money for a down payment. Had they done that, they could  buy a home today in a solid neighborhood for a good price, with a low interest conventional mortgage, for payments they could afford now and into the future. Jim and Janet are not alone, however. The exerpt from US News and World Report below demonstrates this.

If you would like to avoid situations that can create financial difficulty for you and your family, I encourage you to take a look at http://www.themoneyforlifebook.com/ and take advantage of the FREE white paper. Or better still the SPECIAL OFFER! -> The paperback version of  Money for Life...in good times and bad - How to Thrive in the 21st Century will be released on May 1st, 2008.

Everyone who buys the e-book version before May 1st will also recieve an autographed copy of the paperback when it is release. No special codes are needed. Don't be an April fool; make the purchase befor April 30th. Shipping and handling charges will still apply. -> http://www.themoneyforlifebook.com/

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"Buyers are well-informed and rational. Investment vehicles might be remarkably innovative, but consumers seem to be as gullible as ever. It's obvious now that some home buyers over the past few years took out loans far beyond what they could afford, with foreclosure probably inevitable even if house prices had continued to rise. But even people who consider themselves financially literate aren't so shrewd. A 2007 study by the Federal Trade Commission, for instance, found that:

- 20 percent of borrowers looking at mortgage disclosure forms couldn't identify the interest rate amount

- 24 percent couldn't tell which loan was less expensive, when looking at two different applications

- 30 percent couldn't tell if the loan included an expanded "balloon payment" at some point

- 44 percent couldn't tell if there was a prepayment penalty for refinancing within two years."

Excerpred from U.S.News & World Report
4 Subprime Myths That Could Derail Reform
Friday April 4, 1:56 pm ET
By Rick Newman

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