Mortgages

When calculating the cost of a mortgage, it's important to realize that insurance and taxes will be included so the end result may be more than you pay in rent right now. We were told to calculate what we could afford for a mortgage and to save any additional amount from discretionary income, to be in the habit of making a full mortgage payment.

In my case, the sale prices of houses would not mean a mortgage payment that's higher than rent; that's because I know I can't afford much and am looking at the low end of the spectrum. I know too many people who have gotten in too deep with bad decisions. There are mortgage calculators available on most real estate webpages so if you start looking at options, it's easy to see if it would at all be a possibility.

In one case, a classmate bought a house before graduation, based on a clerkship that paid well but in the end, it was unsustainable on her post-graduate income; in another case, a veteran didn't go to the VA first, but instead headed for a Countrywide mortgage, with no downpayment, featuring a 5-year ARM with a penalty, back in the day you could still do that, and a 15-year balloon payment on an interest-only mortgage. All I need to know is that the loan was through Countrywide and I know that someone with good credit would have done better elsewhere.

Every month I have less debt. It's just a tiny bit less but every little bit helps.