Six Mortgage Mistakes (Advice: Don’t Make Them)

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As they say in blog land, hat tip to OC Register mortgage blogger Mathew Padila for his link to thestreet.com’s primer on ‘Six Ways to Avoid A Mortgage Mess.’

Matt likes Number 3 (Don’t Take Out an ARM Just Because the Lender Recommends It); LA Land prefers Mistake Number 6, although to us it doesn’t sound like a mistake -- it sounds like a clinical description of home-buying psychology in Los Angeles:

‘Mistake Number 6: Not Picking a Less Expensive House (or SUV)’

‘You need to consider just how much you are spending and why you are spending it. During the real estate boom, it was not uncommon for people to take extraordinary measures to buy the most expensive home they could possibly afford.

These measures included buying homes with no down payments, taking interest-only mortgages or option payment (negative amortization) mortgages, in the belief that their homes would just keep increasing in value.

Maybe you don’t need to buy the biggest possible house. Maybe you don’t need to buy an SUV that costs more than half your annual salary. Consider living below your means. Not only will it save you money and (hopefully) lead to a more comfortable retirement, it might be a great way to reduce stress!’