March 17, 2009
Are you a gambler?
“Know when to hold em, know when to fold em.
Know when to walk away, know when to run.”
Prophetic words from Kenny Rogers in his tale of the gambler.
I am amazed at how many people out there are closing their eyes to
the realities around them. We are in tough economic times as we have heard over and over again these past few months, and yet there are so many of us that are letting our hearts, rather than our brains do our thinking.
As a mortgage broker, a phenomenon that I have been experiencing lately, has to do with the amount of people that are approaching me to help refinance their mortgage, or to procure a second mortgage and in many cases regardless of the source of these loans. Refinancing in mid term even with an “A lender” incurs major costs in penalties. Banks will charge between 3 and 6 months interest in penalties, should you decide to break your mortgage contract. Some individuals are willing to seek out the aid of a private lender who will charge upwards of 14% on a second mortgage, not including setup and application fees that would add an additional 2-5% on top of the already high rate.
Common sense would dictate that you step back and look at your financial situation with an unprejudiced eye. You need to determine whether you are better off to pay exorbitant interest rates which you most likely can’t afford to pay, (If you could afford it, you would not be in this situation in the first place) or cut your losses and sell your house now before the debt buries you, and you have to settle for a greatly reduced price out of desperation.
I am not trying to preach doom and gloom. On the contrary I want you to wake up and realize that you could live just as well, and in many cases better, in a smaller property, or even a rental. When your financial situation improves you can once again consider a bigger and better house. Life is too short to put material possessions above the needs of your family.