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Get on Top of Your Finances Before They Get on Top of You: Sit Down with a Residential or Farm Mortgage Advisor
What's your feeling about debt? Teachers and parents teach us from a young age that debt is a very bad thing—something to be avoided like the plague, at all costs. Others are cavalier about debt, building up credit card interest without much consideration. The ideal place to be is somewhere in the middle, especially when it comes to mortgages. A mortgage can and should be something you consider 'good debt,' and sitting down with a mortgage advisor can tell you where you sit on the matter.
Good Debt vs. Bad Debt
At WealthCreators Ltd, we are advisors that help clients with residential mortgage and farm mortgage matters. One of the questions we hear most frequently from both types of clients is about the difference between 'good debt' and 'bad debt.' How could any debt ever be considered 'good'?
Good debt is a manageable amount of debt shouldered to purchase a valuable asset that is expected to appreciate over time. Under the right circumstances, a mortgage loan will fit each of these qualifiers. Repayment terms will be equitable and manageable for the property buyer. The loan itself will be used to purchase a home or property that is likely to hold its value well over time, even keeping pace with inflation.
Buying a home is a much better investment than, say, buying a brand-new car. Cars are notorious for how quickly they lose value. A vehicle can lose up to 11% of its value the moment you drive it off the lot, and it continues to depreciate as you drive it and as time passes. Going into debt to purchase a new car, then, is a lot riskier than going into debt to buy a home.
However, there is still a risk when entering into any kind of debt, even a mortgage loan. Therein lies the reason that seeking mortgage advice before you go through with a loan is so important. You need to make sure that the terms of the loan are fair to you, that the repayment expectations are manageable and that the interest rate won't eventually crush you.
Navigate the World of Mortgage Loans with the Help of the Right Mortgage Advisor
Does the mortgage you are considering meet the benchmarks of 'good debt'? Multiple factors can affect the answer to this question, such as the cost of the home, the size of the loan, the size of your down payment and the repayment terms. Especially if this is your first mortgage, though, you might not necessarily know enough to judge the risk of the mortgage.
What you need to do is sit down with someone who can provide sound mortgage advice explicitly grounded in your best interests. You won't get that kind of service from the bank, which wants your business and therefore might not be completely honest with you. At WealthCreators, though, you will get an honest opinion from a knowledgeable source. We will help you look at your residential mortgage or farm mortgage from all angles, to determine which steps you should take next. Click here and fill out our contact form to get started.