â€œMind Your Mortgageâ€ by Robert Bernabe is a great resource for both people searching for their first mortgage and people who already have a mortgage.Â Like he says in the book, most things we purchase the prices are cut and dry.Â But with mortgages, the companies can present the fees in a way that you are not sure what you are paying for and it is important to shop around to make sure you are getting the best deal.
I have worked in the Real Estate appraisal business for 20 years and have seen first hand the downfalls of using your mortgage in the wrong way.Â
Even if your mortgage broker tells you they can help you lower your payments and save money, in most cases after the fees are added you donâ€™t end up saving as much as you thought and may have added additional years and interest charges to your mortgage.
In the past few years too many people used their houses as an ATM machine.Â When the interest rates went down, people refinanced their homes and took some of the equity out as cash.Â In some cases, they used this money for purchases such as vacations, swimming pools and other items they could not have afforded otherwise.Â But in some cases they added additional years onto their mortgage which also adds interest.Â
He also reminds us not to rely on your home as a retirement plan.Â When the values go up you may have quite a bit of equity in your home.Â Â But when values drop like they have in the last few years so does your equity.Â
By adding just a little to your mortgage principal each month, over time can make a big difference in the amount of interest you end up paying on your mortgage.