Since the beginning of the Real Estate Lending, we have been taught that we need to put large amount of money down and go with the shortest term that we could afford. In today’s economy, this is one of the most riskiest investments a person can do.
Here’s why… When our parents and grandparents were buying residential real estate here is what was going on in the economy that is different from today:
- Interest rates were above 15%
- They were living in the same home for more than 20 years.
- They only had 1 or 2 jobs in their working career.
- They had pensions to take care of their retirement.
- The had a strong national economy to rely on.
- They had social security to help with their retirement.
If I was living in those times, I would probably go with the recommended terms and conditions that everyone was telling me to go with. However, we aren’t… Here is where we are today:
- Interest rates are below 4%.
- People are moving out of their homes every 5 to 7 years.
- People will have a totally new career up to 7 times in their life
- Companies are canceling their pension programs
- We are is $17 trillion in debt as a nation
- Social security is becoming obsolete and is no longer reliable.
This new series, we will be discovering the The 5 Phases of the “Mortgage Matters System” and why it is important to our financial success.