Why Get a Mortgage?

James Henry Abrina By James Henry Abrina, 2nd Sep 2010 | Follow this author | RSS Feed | Short URL http://nut.bz/1tz34dqb/
Posted in Wikinut>Money>Mortgages

Having a mortgage loan is something that can make or break a family. Does having one suit you? Should you take the risk?

Why Get a Mortgage?

Mortgage is one of the most used type of loan not only across the United States but all around the world as well. After all, who would not like to have his own house the easiest way? This loan plan simply means finding an institution, more commonly in the form of banks, to pay for your dream house's price which you will repay them in a period of 15 to 30 years. The monthly installment which is called amortization will be your due. Although liquidated assets like land titles, cars and other properties are not often used as collateral, that does not mean you are free to repay a debt without a risk involved. The house that you are repaying them is the collateral itself. Once you stopped or are not able to repay them through amortization within a contracted period of time, they will resell the house to cover the debt that you should have paid. With that risk, you will lose more in the long run. But like they say, the risk is far outweighed by the benefits and practicality of this choice. Besides, why would you enter a deal with hundreds of thousands to millions worth of property if you cannot repay them anyway? Or better yet, why would the lender approve your application without keen evaluation of your credibility and reliability as debtor?

Despite all the advantages involved in availing a mortgage loan, many people are still having second thoughts on whether to enroll or not. In a hindsight, it can be really daunting as having a debt for more than 20 years, or almost 30% of your lifetime is a scary task to fulfill. Who else would like to repay a debt for the rest of your career years? But as oppose to that bug inside of you, ask yourself if you are also willing to spend most of your lifetime squattering elsewhere or jumping from apartment to apartment without a permanent abode? If not, why not take a mortgage?

Some are even having doubts with the legality of a mortgage contract as it is quite surprising to know that there is someone willing to lend you big bucks for purchasing a property with a payment scheme that spans over the whole lifespan of some companies. The point of the matter is, lenders are giving you an overly extended leeway of repaying to increase the chance of succeeding in the contract. Giving you a very short period of repayment will also increase their risk of losing in the business. Besides, most of what you are paying are the interest rate, or their income as a part of the deal. You give them business, they give you time. Weighing all the benefits will just leave you a winner so do not fret.

Tags

Amortization, Bank, Debt, Finance, Loan, Money, Mortgage

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author avatar James Henry Abrina
For the improved/edited versions of the articles here and for my new posts, please visit the following sites:

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