Wednesday, July 30th, 2008...3:53 pm
10 Things I Hate About Mortgages
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- Getting the mortgage: The first port of call is applying for the mortgage. You’ve shopped around for what houses are available; you and your family/loved one(s) have spent forever just looking and looking. You’ve finally found your dream house and everyone’s excited, and then it comes to getting the mortgage. A lot of discouraging things can happen here, unfortunately. Maybe you stumble at the first hurdle and have such a poor credit rating that you get turned down for any mortgage you apply for. Maybe you’ll get offered a loan that just doesn’t suit you, so you can’t accept it. Whatever the case, finding how and where to get the best deal for your needs is the first in a long line of mortgage pet hates.
- Understanding the mortgage: Now you’re getting started with your new mortgage and suddenly a whole host of unfamiliar phrases and technical jargon rears its ugly head. If you’re seasoned mortgage-hunters, then this poses no problem for you. However, there are those that are going to be new to the mortgage industry and are as yet unsure of how it works and of the language contained therein. Hopefully you’ll get a reasonable mortgage broker and they’ll be able to explain everything in layman’s terms for you, otherwise you’ll constantly be running to the real estate dictionary to distinguish between your APRs and your ARMs.
- The broker is key: Sorting out a mortgage is going to be one of the more complicated and possibly arduous times in a person’s life, however it can also be exciting and a great learning experience if it’s handled properly. A key factor in this is having a good mortgage broker. Because the whole process can be quite lengthy, the broker is someone you’ll be spending a lot of time with. If the broker is someone with whom you’re going to have a personality clash with, then everything is going to be made much more stressful. You might have found a great mortgage deal, but if the broker isn’t worth it, then neither is the deal, and this can be quite frustrating.
- The paperwork: The damn paperwork. There’s just so much of it. You’ll be spending a lot of time reading and writing because there’s a lot of bureaucracy involved in this line of business. Everything needs to be written down and documented, for the present and for the future. Signatures will be signed onto everything, so be prepared to get sick of writing your name. Also, there’s nothing much more frustrating than having sent in some paperwork, only to have the mortgage company lose it. Most people will keep copies of any paperwork just in case, but that still doesn’t stop having to resend paperwork multiple times from being frustrating.
- The rates, they are a-changing: This can be quite a common problem amongst mortgage lenders. If you go for an adjustable rate mortgage (ARM), what happens is that lenders will often “bait the hook” with a nice and low teaser rate, to make it seem more appealing than a fixed rate mortgage. The problem here is – and you probably guessed it – that this artificially low rate is then adjusted to be higher later on, after the client has signed on for the low starter rate. Hook, line and sinker, as they say.
- APRs: Annual percentage rates (APRs) are what lenders use to advertise their potentially delicious loans to us average people. They serve as a means for you to be able to compare mortgages to other lenders that are operating on the market at that time. However, the definitions of each lender’s APR are subject to certain discrepancies, namely the APR policies can differ greatly from lender to lender. Some fees are omitted, and APRs might vary depending on the size of the loan offered, and the type of loan it is (e.g. fixed rate or adjustable rate). Sometimes it can be quite difficult to tell the difference if you don’t know all the ins and outs of each company’s APR.
- Stealth fees: Unfortunately, not everyone is as honest as you and I, particularly when vast amounts of money are involved. Just like a restaurant trying to sneak something you didn’t order onto the final tab, so will some dishonest money-lenders charge you for services that weren’t provided, and sometimes just plain don’t make sense. It’s always best to ask for an itemized list of your closing costs, just so you can check that everything’s going according to plan, as sometimes strange fees can crop up when you least expect them.
- They never get the money: I understand that mortgage companies sometimes get overworked and difficult to run, especially when keeping track of all that money. I suppose it’s inevitable that sometimes bad things happen, things get misplaced, lost, or forgotten. But it’s so damned annoying when it happens to you. Say you’ve sent in a current or an extra payment, then the monthly/yearly statement comes through and that payment you made – which is really quite a lot of money – hasn’t been listed. Makes you worried at first, then angry, doesn’t it? Me too. (These last two points aren’t so much to do with the inner machinations of the mortgage industry, but they annoy me all the same, and I’m sure you’re bound to understand when I say that they have earned their rightful places on this list).
- Repayments always come at the worst time: You know how it is, you’ve done the shopping, the kids have got new clothes, the credit cards are paid and expenses are going according to budget, but suddenly…BAM. A mortgage repayment is due, maybe catching you by surprise, unless you’re the shrewd type that has planned everything down to the finest detail, or maybe you’re just careful and happen to have enough to make the payment right on time. Or there’s that period just after the money has left your savings account. It might be a while until payday, so you’re left feeling uneasy with your financial situation: What if you’re sick? What if there’s some kind of crisis? Will you be prepared? It’s the general feeling of uneasiness around payments that I don’t like. But I imagine it’s different for everyone.
- It costs you money: This is so obvious that it might seem stupid. But this is a list of hates and dislikes, and I’m pretty sure the number one reason for having dark feelings towards mortgages is that it costs you, dearly. Mortgages are expensive loans, and no one likes being in a situation (financially) that requires you to borrow money from elsewhere, not to mention the fact that you’ll end up paying MORE as you return the loan. Let’s just face it, as a species we just don’t like losing money, and mortgages are a cause of monetary loss, I’m afraid.
5 Comments
August 3rd, 2008 at 2:17 am
“1# Getting the mortgage”
Well at least now you know to get a “pre-approval” before you go house hunting
(pre-approval is when you go and see the bank and the bank tells you, after careful analysis, that they are going to lend you $xxxx amount)
August 17th, 2008 at 8:15 am
Sandra Kellog wrote about it lately but i think what you wrote is much better.
August 20th, 2008 at 1:36 am
Thanks for this in-depth look at the ins and outs of buying a home with cash v. financing! Sometimes we forget that not everything is always as cut and dry as others make it seem.
August 20th, 2008 at 7:48 am
Well quite interesting topic 1 muxt say !!
All the points are valid and the martgage buyer should take these thins into consideration before getting into mortgages.
September 22nd, 2008 at 8:17 am
i am gonna show this to my friend, bro
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