On average, 229,961 of the hours in our lifetime are spent sleeping. That number equates to approximately one third of our lifetime. With that in mind, it’s easy to see why some of the biggest investments and costs we pay in life revolve around where we tuck in every night. Are you paying too much mortgage, unknowingly, for the place you call home? If so, you could essentially be draining your potential wealth in the process.
Everyone Has an Opinion
The business of mortgages is rather tricky to navigate. Everyone seems to have their own opinions on what is best. Your neighbors say one thing, your parents another, and the media suggests something entirely different. Everyone thinks they know what’s best, and because we value the opinions of those close to us, it can be easy to take that opinion and run with it. As such, people are often not receiving the correct information surrounding which mortgage is best for them.
A Quick Mortgage Exercise
Let’s take a look at our mortgage literacy with this quick exercise. Think about whether you believe these statements are true or false:
- A big down payment, rather than a small one, saves you more money over time
- A 15-year mortgage saves you more money than a 30-year mortgage over time
- You can save more money by paying extra principal
- The main factor in determining the cost of a mortgage is the interest rate
- A house that is completely paid off is more secure than having it completely financed
As stated previously, everyone has an opinion on mortgages. I’d bet you answered those questions rather confidently. But, if you hesitated to any one of those questions, ask yourself what that means about your mortgage decision. Making a mortgage decision about what you thought you knew, and turned out to be wrong, you could be seriously impacting your wealth. These statements may have some truth to them, but your current circumstances may prove these answers false. That’s why it is important for your opinions to be validated by a financial planning professional.
Going at it Alone
It’s completely normal to turn to those in our lives for decisions regarding finances. However, a majority of people do not have the industry knowledge to properly advise on important financial decisions that could potentially hinder your ability to prosper. Think of it this way: we don’t normally go to our neighbor when our car breaks down. Instead, we take it to a knowledgeable and qualified mechanic who can give us the best solution to our problem.
When choosing a mortgage tune out the static and opinions of others. Instead, visit a financial planner who will look into all aspects of your finances to help you determine the best option for you.
Chris Jacob is a Registered Representative with Saxony Securities, Inc.. Securities offered through Saxony Securities Inc. (SSI). Member FINRA, SIPC. Non-security products and services or tax services are not offered through SSI. Cadeau is not affiliated with SSI.