Education

History of Mortgages

In the early days of homeownership, mortgages didn’t exist. To purchase a house, you had to pay cash in full. After the Depression, Franklin D. Roosevelt tried to stimulate the economy by creating a new agency to boost home ownership called the Federal Housing Administration, or FHA. For the first time Americans were allowed to finance part of their homes with "only" 80% down. Americans were able to finance the 20% on either 5 or 7 year terms!

Over time, the down payment requirement decreased and the 15 year term was introduced. Finally, the 30 year term was introduced to allow almost all Americans the opportunity of home ownership. Consumers focused on the lower monthly payment and free cash flow the longer terms created, never looking at how the loan really works. Lenders collected billions in extra profit as a result, never daring to remind consumers of the benefits of the shorter terms, as that would severely cut into their profits.

Making the most of your Mortgage

Fast forwarding to today, there have been unethical brokers, bankers, lawyers, investment advisors, just as there have benn in every other industry and professional,  that gouge consumers while leading them into loan programs that the consumer is not qualified for nor can they really afford.  YOU NEED TO KNOW WHO YOU ARE PUTTING YOUR TRUST IN and you need to know IS MY MORTGAGE CONSULTANT, ADVISOR, BANKER, BROKER, ORIGINATOR QUALIFIED, TRAINED, TESTED, EDUCATED, EXPERIENCED, AND BACKGROUND CHECKED. Mortgage terms continue to increase, with recent introduction of 40 year and even 50 year mortgage terms.

Next time you refinance your mortgage, consider reducing the number of years in the term (i.e. instead of a 30 year mortgage opt for a 20 or 15 year term) or consider using one of the debt reduction programs that will get you OUT OF DEBT COMPLETELY within 1/3 to 1/2 the time. In a traditional 30 year mortgage, very little principal is paid in the first years. In fact for a traditional 30 year loan amortization, it’s not until the 22nd year of the mortgage that half of the original principal is paid! You will be saving not just years but thousands of dollars of interest as well with either of these options but you will want a side by side comparison made for your life style, finances, income, and expenses.

Bi-Weekly Mortgages or NOT

By simply making bi-weekly payments on your mortgage, you can build equity faster, save thousands of dollars in interest and cut years off your mortgage. There are other means and programs that will get you OUT OF DEBT COMPLETELY within 1/3 to 1/2 the time remaining if you would care to find our more of these program just send an email to debtfree@klcsloanteam.com and we will be glad to give you a free analysis 

Blemished Credit? Not a problem!

Does your credit leave something to be desired? Increasing your credit score can help you qualify for the mortgage program you want and deserve. Contact our credit correction partner at creditcorrectioninfo@klcsloanteam.com to confidentially discuss your unique situation.