Now I know you, my sophisticated readers, find it obvious that ARMs and Balloon Payments are bad ideas but, in my previous life in the real eastate title business, I found that even the most savvy investor often fails to consider the long-term costs of even a conventional mortgage. Many people make poor home investing decisions because they don’t fully understand the debt they are taking on or the alternatives available to them.

A big mistake many people make is getting into a home too early in life or spending too much on their first home. Talk to your parents, many of them lived in a "starter home" at first and, when they had built up equity or made a profit on that home, THEN they moved into a larger home - a very sensible approach to building home equity. Unfortunately, many people today fall prey to the standard marketing ploy of getting "as much home as they can afford" rather than as much home as they can COMFORTABLY afford - a VERY big difference.

This did not matter when homes went up and up and up because even a bad investment made a little but "this time it IS different" and we may be in for an entire decade in which we may not see ANY rise in the value of homes - this is what has happened to Japan for the last TWO decades. I’m going to go over some of the numbers, give you a few tools and see if we can’t find some ways save you $100,000 on a $200,000 loan and show you how to set your kids up for life - does that sound interesting?