It never ceases to amaze me how people listen to everyone but who they should be to determine which mortgage is best for them. They listen to the media, their neighbors, friends, family members, and even realtors to find which mortgage is best. But are they helping or hurting in the long run?
Now, a few of these individuals do have the knowledge necessary to make a good decision on the borrower’s behalf, but the vast majority are simply throwing out suggestions, blind to the facts, and more importantly, not knowing the borrower’s overall financial picture.
Compounding the problem, most mortgage professionals seek the money more than taking the time to find the best solution for their clients. Let’s face it, it is easy to get a 30-year fixed rate mortgage to anyone these days because that is what the borrowers have been told is the best thing for them right now (just read the news). But is it really?
Believe it or not, the Option ARM, yes those dreaded, "evil" loan programs that place homeowners in foreclosure while making mortgage brokers rich, are actually the best solution in a "perfect world". But alas, we are not in a perfect world. As Americans, we tend to do things we shouldn’t, such as use our house as an ATM machine.
How are we to find the best mortgage program for ourselves? Friends, family, realtors, mortgage brokers? Not likely. We are really on our own if we want to find the best solution. We must do our own research and find the "advisor" that will help us determine the best solution.
What should that advisor be like? It depends on you. Certainly they should show their level of expertise. Certainly they should show themselves to be trustworthy. Certainly they should offer more than one solution. Beyond that, it depends on you, and no one else can make the final determination of which advisor you should choose.
Now, be careful as you decide though. Asch’s Conformity Experiment can prove deadly in your decision making process. You see, that experiment proves that while you clearly know the correct answer, being surrounded by those answering incorrectly may lead you to answer incorrectly as well. A mistake on your mortgage, however, can prove very costly.
So, as you move forward in your decision on which mortgage to use, keep an open mind. The best solution may be the complete opposite of what you are thinking right now.