It can be difficult knowing where to begin with personal finances. What are the most important concepts that can help you be better with money? How does an understanding of diversification help you grow wealth? What’s the relevance of your FICO score? Does inflation have a big impact on your day-to-day activities?
All of these questions and more are answered in Maureen’s latest course Personal Finance Concepts on Highbrow, an email-based education platform.
Here's an excerpt from Lesson 5: Mortgages.
A mortgage is possibly the largest financial commitment that an individual will take out in their lifetime. More specifically, a mortgage is a legal agreement by which a bank lends you money to purchase a house. In exchange for the money lent, you are signing up to pay the money back at an agreed interest rate and if you can’t repay your mortgage, you will give up the ownership of the house to the bank to offset the debt owed.
A report from Pew Charitable Trusts shows that 80% of Americans have debt and that of those 80%, 44% have mortgage debt. So, why do so many of us hold mortgage debt? It’s because most of us can’t afford to buy a house outright. Even if we saved every penny we earned, with the average 2-bed apartment in Buffalo, New York costing $200,000, we’d struggle to save even half...