Education! Education! Education!
I was asked recently what I thought the most important thing is for consumers in the mortgage field. Recalling the maxim that the most important thing in real estate is “Location! Location! Location!” I quipped, “Education! Education! Education!”
Many of us are familiar with houses; we have lived in them for much of our lives. We know about kitchens, dining rooms, living rooms, family rooms, bedrooms, and so forth. We have preferences that we have developed over the years, which is why some people buy a center-entry Colonial and others opt for a Ranch-style home.
The “location” question arises and is very important because sometimes people forget about it. They fall in love with the style of home they want, but one that is in a terrible location. A smart buyer will have his or her eyes on location as he or she searches for certain home features.
Of course, there are other important aspects of homebuying that are also important, which is why it is easy to write about it. Experts can easily rip off several hundred pages, and yet there are people who think it is easy and that they don’t need to learn anything.
My point here is that without education, you are at the mercy of people who know a lot more than you do about the process. If you happen to find a good, caring agent who will represent you, that’s OK, but it would be better if you were educated and could participate with some degree of intelligence in the process.
The other huge problem is that not everyone who is in the real estate or mortgage business is either knowledgeable or trustworthy. If you are dealing with one of them, you are at the mercy of people who will put their own interests above yours. That is a prescription for disaster, and why so many people feel angry when they realize they were ripped off. Well, they should be angry, but it would have been better if they had been better prepared in the first place. Then they wouldn’t have had a cause for anger.
In the mortgage side of the business, it’s somewhat more difficult because you don’t have the familiarity with the business that you might have felt when you were shopping for homes. Sure, you have credit cards and probably a car loan, but those are a lot easier to understand than mortgages.
The mortgage business has a lot more “moving parts,” and a borrower has a lot of decisions to make. Make the wrong ones, and they will cost you thousands of dollars. If you find yourself in a truly wrong position, it may cost you thousands of dollars to refinance and get out of the predicament.
My experience is that most people come to the process with misconceptions and have already made some wrong decisions. Our first task is to get them to “unlearn” and then learn how to make better decisions.
There are many choices that need to be made, and you can either be educated yourself on how to make good choices, or you can try your luck by letting someone else make them for you. Which would you prefer?
A high credit score often equals savings on loans and credit cards.
/life of loan
/life of loan