Do you know why most people hate their mortgage?

It's because they know that over the life of that 30-year loan, they will have spent more in interest than the house cost them in the first place!

So what's a soon-to-be homeowner and an existing homeowner to do?

A bigger down payment upon purchase is always an option,

So is making additional monthly principal payments...

and then there's a 3rd option for those who subscribe to the Missed Fortune philosophy of accumulating wealth,

Invest your otherwise additional monthly payments in an interest baring account whose rate-of-return is higher than the interest paid on your mortgage. Essentially, you accumulate enough assets to pay of your mortgage in fewer than 30, even 20 years... [give me a call or send me an e-mail, I can show you the math]

Now some will argue with what I'm about to say next (in fact quite a few of you might)... Ultimately, no one way is better than the other. What's really important is, which method brings you greater piece of mind?

Best,

Mortgage Planner

p: 323.572.8322

e: rbueno (at) worldwidecredit (dot) com

Author of www.industry-report.com

 

14 Comments on Why People Hate Their Mortgage

AUG
13
2008
362,046 Points 5 Featured Posts Localism Sponsor Attended Rain Camp

Richardo, nice to see you!  Thanks for commenting on my pix of the day.  Re mortgages, every day I dream more and more about living in an Airstream or a houseboat on a lake.  I know it's not a smart financial decision; however, anchors don't work for me!!  Have you been invited to the Triiibe?

5:03am • #1
106,005 Points 9 Featured Posts Outside Blog

Hiya Susie! Good to see you :-P

So what's all this talk about Triibe? I hear it's all the rave and yet nothing!

5:05am • #2
335,782 Points 1 Featured Post

Richard, I think that you are correct, what ever brings you piece of mind.  But cultural norms change, that's why we are in this mess if the first place.  No longer can you find kids wanting to live in their parents homes. So we have what amounts to be rent.

5:25am • #3
629,113 Points 41 Featured Posts Localism Sponsor Outside Blog Hit Router Called Shot Master

Ricardo - Where have you been?!?!  It is so good to see you again!  I know I hate my mortgage - count me in that group!  Great advice about the interest bearing account - make your money work for you!

5:52am • #4
1 Featured Post

Richard,

Great post! I, also, subscribe to the "Missed Fortune" philosophy of mortgage planning. I am sad that many of our best tools have left the market for a while, but sound planning still makes a difference in the life of our clients!

Billy Manders

s r
6:07am • #5
320,757 Points 5 Featured Posts Outside Blog

I hate my mortgage. I hate the fact that I have to pay back 300K in interest over the term. Maybe. I bought some lottery tickets.

6:37am • #6
1,174,515 Points 29 Featured Posts Localism Sponsor Outside Blog Attended Rain Camp Called Shot Master

Ricardo, I think you are right, it hurts to think about all the interest paid to the bank.   Yes the points you outlined can certainly lessen the pain.

6:39am • #7
761,226 Points 13 Featured Posts Localism Sponsor Outside Blog Attended Rain Camp

INteresting post. I always try to pay extra when I can on the mortgage. Hey it got me in the house so I do not hate it. I just want it to go away

7:06am • #8
438,333 Points Outside Blog

Mortgages are a necessary evil

Just my opinion

Bill

7:43am • #9
494,837 Points 75 Featured Posts Outside Blog Called Shot Master

Ricardo - I'll check out the link later when I have the time.  It's good to see read you my friend.

8:06am • #10
106,005 Points 9 Featured Posts Outside Blog

@Leesa: hiya there! Good to be back here on A|R. Talk to you soon...

@Billy: Missed Fortune is a great read and the lessons in there are priceless!

@Laura: wouldn't we all love to cash in on a big lottery!!!

@Jennifer: yup. And I'm not necessarily saying that a mortgage is a bad thing either (it's a great asset to have). It's just that the fact of the matter is, these are the kinds of things people think about...

@Charlie: I know what you mean. I usually create an amortization schedule for clients showing them the time of payment necessary to pay of their mortgage in X amount of years...

@Bill: yes they are. But they're a good thing to have. Leverage!

@Jason: It's good to be back! Nice seeing the A|R crowd ya know!?

1:43pm • #11

Ricardo, Yes it is that "Peace of Mind" that influences what direction many of us will take.  I think cultural and generational will influence that "Peace of Mind" decision.  But, for those that save that "extra" discretionary income in some type of income generating investment vs paying down the mortgage, they will have to stick to the goal and not use that income for other purposes. AJ  

3:48pm • #12
178,692 Points 11 Featured Posts Outside Blog

Ricardo, I always go for options #1 when I can afford it and absolutely utilize option #2.  Option #3 is a bit difficult in today's market.  I'd like to be able to put some money in the bank at an interest rate higher than my current 6.25% mortgage.  :-)

10:51pm • #13
AUG
15
2008
1,949,110 Points 155 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

There are people that always are telling home owners to never pay off their mortgage an I say, if it makes you feel better and secure knowing that no matter what the house market does your house can't be taking away unless you don't pay taxes, then do it!

Todd Clark, Helping Families Home - www.IFoundYourNewHome.com

10:09pm • #14


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Ricardo Bueno

Los Angeles, CA

More about me…

Diverse Solutions

Office Phone: (877) 348-7654

Email Me

I work for Diverse Solutions, Inc. a real estate technology firm based in Irvine, CA. We offer Mapping IDX Solutions and a WordPress IDX Plugin to make real estate agents more successful. Overall, I'm passionate about marketing and technology for the real estate industry!


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