Are you searching for Suze Orman on Mortgages. I found this video clip of Suze Orman on Mortgages. Basically, she is advising us to have our mortgages paid off before retiring. As a fellow Financial Advisor, I totally agree with her stance on this issue. I am a Financial Advisor with an A+ Superior Rated Carrier here in Atlanta, Georgia. I am also a Loan Officer with a leading mortgage company here in Georgia as well. I feel as if it's extrememly important for those retiring to get a firm hold of their finances. Retirement should be enjoyable. You should not be bogged down with consumer debt and hundreds of thousands of dollars in mortgage debt. If you are not close to retirement, I can help you put a plan into place that will help you pay off your mortgage and consumer debt in record time. First, I want you to take a look at what Suze Orman's stance is on paying off your mortgage prior to retiring.
Suze Orman on Mortgages
Newswatch Featuring United First Financial
Call Derik Tutt at 404-200-5532 to learn more about the Money Merge Account and how it can help you and your family eliminate your consumer debt as well as your mortgage.
Loan Analysis $200,000 @ 6% Interest
A person buys a $200,000 home at 6% interest. On a 30 year mortgage they'd have a monthly payment of $1199 per month. Not bad, right? 6% interest is fair, right?
Multiply $1199 by 12 and the potential homeowner would pay a total of $14,388 for the entire first year. One might think, "Cool, I've got close to $15,000 in payments under my belt. That should knock off quite a bit from my loan amount." WRONG!!! After one year of payments the person would have paid down the balance of the loan $2,456.
Wait a second! Flag on the play! Player off sides! Back it up! I'm no math genius but YES, out of $14,388 only $2,4,56 is credited toward the principle. Not even $2,500 will come off the balance. $11.932 in interest.
Whose pocket does the principle go into? It goes into yours as equity. Whose pocket does interest go into? It goes into our good old friend's pocket. "The Bank".
Let's fast forward 5 years into the loan. A total of $71,940 will have been paid to the bank. How much came off principle? A whopping $14,159. Which brings the balance down to $185,820. So not even $15,000 came off the balance after making $71,940 in payments.
Year 21 takes the cake folks. Your balance would be $100,573. Total interest paid would be $201,548. Is this making more sense now? Now do you see why all the largest buildings in major cities are owned by banks?
Let's get to the bottom line. Only 3% of the population actually pays off their 30 year loan. If you're like the other 97%, things happen and you will have to refinance every so many years or you will move into another home. Don't feel bad, the system is designed to keep the homeowner in debt.
So after 30 years, when this mortgage is paid off, the homeowner will have paid a total of $431,640. What's wrong with this picture? Paying $231,640 in interest is legal robbery in my opinion.
A person would pay more than double what the initial loan amount was. With the bank receiving all of that interest, no wonder why it takes 30 years to pay off a mortgage. Just wait until you see what an amortization schedule looks like...
The *True* Definition of "Mortgage"
Since we are going to be on the topic of mortgages, I feel it is only right that we take a close look at the term. If you did not know, the term mortgage is derived from Latin terms. The first term "Mort" is Latin for "Death". The second part of the term "gage" is from the sense of that word meaning a pledge to forfeit something of value if a debt is not repaid. So mortgage is literally a death pledge. It's sad, but most people will pay a mortgage until they die. I'm sure we all know folks getting up there in the age category that are still working at paying off their homes.
"The American Dream"...Is it just a dream?
The "American Dream"...we hear about it all the time. Virtually everyone in this country wants to own their own home. So once we find out that we are qualified to purchase a home, we then get connected with a real estate agent and rush out to find the home of our dreams. The thoughts that go through our minds-"Independence", "I'm finally going to own my own home", "This is one of the best investments I'll ever make in my life." There's nothing wrong with thinking these wonderful thoughts. Buying a home is a major purchase and arguably one of the best purchases/investments one can make in life.
So you find that "Dream House" and you lock it under purchase and sales agreement. You have the inspections done and everything checks out fine. The appraisal comes back in tune also. You get the "clear to close" from the bank and you sign the mile high stack of documents in a rush. "Congratulations, you are now a homeowner!!!" Or are you really? You now have a 30 year mortgage. Seems normal, right? Your parents, grand parents, and great grand parents all had 30 year mortgages so there's nothing wrong with you having a 30 year mortgage too, right?
Oh, and I am not suggesting you go out and get a 10, 15, 20 instead. There's a lot of information involved with owning a home that the banks simply won't tell you about. Thank God you found us.
