Beginners' guide to mortgages - MoneyWeek investment tutorials
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- Опубликовано: 30 июл 2024
- A property mortgage is the biggest debt most of us will ever take on. So choosing the right one is vital. Tim Bennett explains the basics of mortgages and highlights the main pitfalls to avoid.
Such things they dont teach you at school, this was great!
+Kerri Simpson Agreed
+Kerri Simpson I know. They should teach economics and financial accounting. Instead they teach arts, communications, social studies. Not that these other things aren't good but they should focus on things which will impact us for the rest of our lives.
+Kerri Simpson instead you get useless stuff like stupid religion and home economics
Kerri Simpson I learned this in school in like 3 different classes. At least.
Zachary Winfield private school doesn't count.
I have struggled and struggled to understand financial concepts all my life and you have just made it all made sense in a concise and non-patronising way. Thank you so much!!!
Excellent video. Very good presentation style and language used, clear speaking, good pausing, good phrasing. I understood everything and i'm a financial dummy :P
I am also a financial dummy 😂😂😂😂
So helpful, really opened my eyes. Everyone keeps telling me to buy a house because renting is dead money, and a mortgage really isn't a big deal. Don't know what they're on about as it obviously is a massive deal, glad to have informative videos like this.
Diede Lauwen I bought my first house when I was 21. Sold my car and everything to raise the deposit, best thing I ever did.
@@Kadaf1 can I ask your deposit I'm looking at doing the same thing
Harnett. You have nothing to bargain with when you are old or needs equity. The money that your are paing in rent, the person is paying their morgage with and buying another property. When they send you home after working 40 years, you go back homw with the clothes on your back, nothing to show what you work 40 years for. Nothing to collect rent for to give you a meal. So you can pay someone's rent for 40 years and let them sell the building under you or you can pay a morgage.
@@IamBrendaMarie in 40 years u can buy a house and save cash for your retirement just do the maths
@@alan90810 Thank you. I bought my first house at 21 years.
Interest rate is currently at 4.75%(8th rate hike since March last year) Inflation at 7% and mortgage rates is at over 7.5% but yet minimum wage remains the same and my retirement portfolio has suffered tremendously these past years, so my question is how do senior citizens retire and live off such unstable economy. The long term game is obviously not for me at this point.
It’s getting wild by the day. The prices of homes are quite ridiculous and Mortgage prices has been skyrocketing on a roll(currently over 7%). Sometimes i wonder if to just invest my spare cash into the stock market and wait for a housing crash or just go ahead to buy a home anyways.
@@hermanramos7092 I get such worries too. I'm 50 and retiring early. Already worried of the future and where its headed, especially in terms of financies and how to get by. I'm also considering making my first investment in the stock market, but how can I do so given that the market has been in a mess for the majority of the year?
@@martingiavarini Personally, I can connect to that. When I began working with "Catherine Morrison Evans," a fiduciary financial counsellor, my advantages were certain. In these circumstances, I would always advise getting professional help so they can steer you through choppy markets and just give you indicators and strategies for knowing when to enter and exit the market.
@@hermanramos7092 Please how do I connect to her? My funds are being murdered by inflation, and I'm looking for a more profitable investing strategy to put them to work.
You're a really good teacher, definitely would have listened to you at school if they taught this!
I agree this should definitely be a learning tool in school as some people struggle nowadays!
I wish school actually teach real education instead of gpa
Agreed! We need teachers who KNOW how to teach. We actually really want to learn 🙂
Excellent video Tim. As an Estate Agent, I found it to be very informative and more importantly, well structured. Thank you for taking the time to make it. Any chance of an updated version explaining the impact of MMR?
This is definitely a great help for the begginers. Topics that were never taught in school need someone who can define every detail in a thorough manner. Thank you for sharing!
Never realised how difficult it was to get a mortgage and its harder now in 2016 :(
Grace Anastasia but you did it! I watch your vids. Congrats Grace ❤❤ love your house vids
I understand the numbers easily, but the practical side of things isn't fun. You work from 9-5 for 48 weeks a year and must pay certain amount of money to a financial institution per month for 30 years otherwise you end up on the street. There's no fun in that. No wonder so many people are so depressed all the time.
Anthony Kernich loser mentality
@@assjulio79 Slave mentality.
You have a point but the way i see it is that you have to pay some sort of rent to live anyway. Why not invest it in to something you own rather than work 9-5 for 48 weeks a year and have nothing at all.
live with family as long as possible
Thanks for these videos. They're straight forward, methodical and very helpful!
ruclips.net/video/0cuRPsYoZo4/видео.html this could help too, hope has value!
Tim Bennett = God of simplifying finance concepts. Incredibly useful stuff!
Brilliantly explained, My knowledge of mortgages was non existent and you have gone some way to help me understand. Thanks
Didn't know that a mortgage was an asset to a bank. Proves this is a beginners guide to real estate. Thank you for the understanding. Good job!
Great video. Felt sick when i found out at 4% 25 years borrowing 300k you end up paying 175k just in interest.
Do the math paying a monthly rent of $1,500 x 12 months x 25 years............ interest is just a small fee to accumulate equity and wealth. Whereas rent is dead money and getting you nowhere in life. It'll make you even more sick. At least after 25 years you'll have 300k to your name.
and chances are the home will worth more than 300k
@@bigpimpin7358 to think that you don't owe money after your morgate where your not paying it over 25 years but 60 years
@@jordanroberts7931 So true
That's one expensive house at 300k 😂
Tim thanks for your time and your teaching. You are professor!!! and thanks to your team too for helping you out. Good job!!
I feel so fucking smart now.
l know right
hahahahaha
Great teaching! Made the complexity simple so easy to understand. Also, I liked the pros and cons throughout the topic!
Tim you are the best financial professor. i am a CFA level 3 candidate and i find your videos very handy.
You are awesome. It sounds like I am just in the room and you are talking to me. Great pacing...I love the straight forwardness of your side comments. lol. Thank you!
This man is really cleaver honestly, his way of teaching is simple which means he knows a lot!
Thanks for making this really simple and easy to understand x
Hello, thank you to make this possible. I am a financially uneducated person with a good graduate salary that is struggling to understand all these technicalities and you are making it easier for me.
What is an arrangement fee that you mentioned in 11:24?
Wow, well explained. You can be a teacher/professor. Thank you very much.
Great video on mortgage loans. Thanks for posting.
Can you explain buy to let mortgages? I know the equity and interest rate tends to be higher, but still difficult to understand. Many thanks
Buy to let?
Dakota Walker it means buy to rent out
Perfect video for what I was after. :D
Me an my partner might have to deal with this very soon an videos like this are so helpful!
Thankyou!
xxx
Now all I need is a job to be able to get a mortgage.
And usually a five to ten percent deposit
Mene Tekel a job, a deposit and a good credit score
Why are you waiting for the government before you can get a job, why don't you create something for your self to make the world change...
A decently well paid job that’s the difficult part
Good luck man hope you get a job soon ✌
You've been really helpful thanks
Really helpful video. Thank you for sharing.
sir you give hight quality and simple education and important for a lot of people and for FREE wich i find it amazing , you are simply a hero
What I don’t understand is, where does the builder surface in the arrangement between a potential house owner and the bank? After all the property is first owned by the builder because he creates it and he is the original owner. So does the bank buy the property first from the builder and then loan it to the house owner? Or what????
I learn something every time I watch a mortgage video, even if it is in pounds!
It was indeed very helpful, and it would be great if you could kindly make a part of this mortgage deal. Thanks
Thank you for making this tutorial, very helpful.
Going on holiday with your mortgage! that is madness indeed! interesting stuff - and very clear :) good video!
You have a gift for straight forward talking.........thanks for the great advice :]
Fantastic video, just what I was looking for. Really helped putting things into perspective for me. Thank you!
Excellent explanation for beginners. Very easy to understand. Thank you!
opened my eyes, was naive to mortgage. hope can get a house soon.
ruclips.net/video/0cuRPsYoZo4/видео.html this could help too, hope has value!
Thank you so much for this! Truly helped
can anyone tell me where to find a mortgage if I want to put my existing home as a deposit without paying any money upfront? And what is the term for that sort of morgage, coz I can't find it on the net?
a bank
Amazing tutorial!! Thanks for sharing such an informative and educative video. It was very helpful
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Thank you so much!! I'm 18 and hoping to buy a house soon so this was really helpful. You're awesome!
Great Video! very well explained, it reinforced my understanding as I was feeling really unsure
great info and well presented
that would depend if the loan is on a reducing basis or a flat basis. If it is reducing, the interest would be calculated on the remaining principal and if it is a flat rate, the interest would be calculated on the original principal. If your banker quotes you a very low flat rate, be aware that you will continue to pay a higher interest through out the term of the facility unlike loans on reducing rates.
I had no idea what a mortgage was.
I watched this video.
Now I feel like a genious.
hi tim :) thanx a lot for all your nice videos .. i found them very useful :) i am wondering if you can you do videos on buy back of shares and collective investment vehicles ( with as much details as possible)... i am a student from india and i will be very glad to learn from you ... you are a brilliant teacher :)
lets say for example i borrow 100,000 pounds for a house and i want to pay back using the repay method(i.e not interest only method). i am reducing the money i owe every month because i am paying a small portion of the original principle every month. But every month, is the interest rate charge on the original principal that i borrowed or on the remaining principal i owe right now.
this guy is great , and he is very informative !!
Learning the basics is the best first step to buying a home
Its a very informative video . Thank you very much. If it is possible then can you please make a video which shows that certain amoun of home loan being taken at certain rate for certain years and is paid in form of monthly payment. And it would be great of you to describe the components such as tax and insurance that a;ffects the loan payment and other factors that are considered by financial institution while giving the loan. Thank you.
Is there a second part to this video?
With the uncertainty of the new year, everyone should be worried about the state of the stock market right now, and might be considering the best stocks to buy that can keep your portfolio on track.
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Great explanations!
This was very insightful to learn as a first time buyer!
Extremely informative ! Great use of examples to show the differences, definitely helped me understand.
why is there a t in mortgage
This was super helpful! Thanks man!
so if I decide to get a mort gage is it possible to have the loan in cash
yes
imran qadir so the bank will count the physical currency out in a back room and give me the loan?
frisbyrb5
Are you talking about paying your down payment in cash? Then yes they would just take your cash and count it.
no they wouldnt hahaha they wouldnt let anyone run off with that much cash, it would be done via a bank account
What happen's if you're 4/5 years in and want/have to move?
Pretty good, usually the hardest part is saving the deposit but once you've got that its easy 😅
The reason our most vulnerable members of society were targeted with “predatory loans” in 2004-2008, especially. Loan-to-values were inflated so lending was available to people without the down-payment. Mortgage “brokers” sought out our most vulnerable- enticing them into buying homes. Teaser-rates (low rates for first year or two) converted into adjustable-rate mortgages after the teaser period. Brokers reassured buyers they’d have no problem refinancing BEFORE the conversion (or end of teaser rate.). This WOULD have worked, but when housing prices plummeted, these homeowners were stuck with (very) high-interest rates, unable to refinance, “underwater” as their home was now worth much LESS than what they purchased it for.
Homeowners stuck with paying exorbitant interest rates (many increasing every six months) and UNABLE to sell. These people were not “deadbeats”, not ppl buying “too much home”. Just average Americans wanting homes and stability for their families! It’s taken almost 10 years for the facts to come out (and MILLIONS of families losing their homes).
This was one of the biggest “cons” played on innocent American families - while our government turned a blind eye. (Won’t even begin to go into the complex, securities schemes behind these mortgages, except families had no idea they had been set-up to fail from the beginning. I find the saddest part of this is how many government agencies, judicial officers, elected officials KNEW the truth and had the power to hold the criminals liable.
Thanks for the introduction to a mortgage topic. You have highlighted fixed and variable rates. Considering that interest rates might be doing going up or down (down, highly unlikely) by a few percents, would it be a right approach to fixed the rate for 5 - 10-year considering you will be living in the property?
Extremely helpful, thank you very much for this clarification!!
very good video, simple, clear, and good for a beginner
thank you for explaining things so well.
Do you still have to pay up to 30 years ? I did my math and it take about 10 years to pay off 100k
Thank you very much. Clicking away with a lil education in tow
ruclips.net/video/0cuRPsYoZo4/видео.html this could help too, hope has value!
Very interesting and well explained video, thank you.
Great advice!
very helpful but still can't find the answer I am looking for. For example, if I now have deposit of 30k, my question is shall I go for 300k house with 10% deposit or shall I go for 150k house with 20% deposit if I can afford monthly payment for both and all other things are the same. Which one would work out better financially in the longer term? Thanks a lot.
My advice is don't get a mortgage at all. You'll be broke for life. No joke. Pay check to pay check is that how you wanna live?
I'm trying to scrape up some money for a down payment, who has 500k I can borrow?
Do you look like Scarlett Johanssen?
Can someone tell me, if I get a mortgage for $100,000 and the projected interest I will pay over the life of the mortgage (say 10 years) is let's say another $100,000 on top of that. I then sell the house after 5 years; do I still owe the bank the remainder of the $100,000 projected interest or do I only need to pay back the lended amount?
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This is what I needed to hear.
No hype, no Brad Pitt salesman type ......and easy to understand.
The things he says should be part of what one is taught at school so as to equip youngsters to more effectively deal with the realities of life.
But then again a smart population means less profit for many institutions.
Excellent video
Ashish Tiwari hhby 6y
2:15 oh snap..!
Is there a video posted for Mortgage Backed Securities?
Many of us are still fighting for our homes bought between 2005-2008. We weren’t told we were contracting into complex security “schemes” and/or the lender inflated the value of the home. The “NationalMortgageSettlement” didn’t give.a dime to homeowners. All the $ went to the “too big to fail” banks.
Biggest “con” ever played on homeowners. The alleged bank (“plaintiff”) NEVER appears in Court - just their “lawyer”. These homeowners don’t even get their equity and most of them were society’s most vulnerable.
Great explanation. Great graphics. Great Vid :)
I'm currently single, if I meet someone one day and get married am I able to move my mortgage and combine it with theirs and even get a different house together later?
You just saved me from making the biggest mistake for 25 years. I'm not even going to buy anymore. I will wait and save up more money.
Great vid how do you calculate Mortage or interest payments
Thank you for this lesson much needed
superb..must say ...u r great teacher
Best video out their for understanding mortgages for me as a teenager
Love this channel, great video
great stuff Mate, well explained and easy to follow
Could you do a video on beginners guide to halal mortgages and a comparison with a non halal mortgage
You're a wonderful teacher!
brilliant video, thanks! :)
The only time I took a mortgage was to start a business but I ended up investing it in the financial market, with TSLA stocks giving me over 2000% boost I paid off and now make over $25k monthly and still creating other sources of income. It takes consistency and dedication.
That’s very much applaudable and commendable, what financial commodities do you invest in?
How so? I did try to trade but felt like a game of cards and I ended on the loosing side. It’s not that easy, just my 2 cents
s great expertise and professionalism to achieve in the market but extremely profitable so I work with a trade analyst round the clock.
Eddy Bruke, that’s his name
E D D Y B R U K E . I N Fo
I’m an engineer and still living on rent while I’m investing, hopefully by mid next year I should have enough to get a good house and settle down.
Can i get a mortgage whilst I'm earning less than £25,000 per annual?
Read these scenarios if you want to understand what's really going on:
1. Wealthy person buys $300,000 home with cash. 20 years later sells the home for $600,000. Profit: $300,000 (minus home ownership expenses)
2. Middle class person who can't afford to pay $300,000 cash for a home (99.99999% of the middle class) gets a mortgage from the bank aka wealthy people. 20 years later middle class person sells the home for $600,000 but ended up paying the bank $600,000 over the course of the mortgage. Profit to middle class person: $0. (You might consider that free rent for 20 years, but that's in a perfect world. That's also a 20 year struggle to make the monthly payments and if most of your money over the course of those 20 years goes towards home payments, then by the end you are technically considered worthless despite the fact that you own a home. Regardless, you earn nothing) Profit to bank aka wealthy people: $300,000.
3. Lower class person rents a home or apartment valued at $300,000, which is owned by a wealthy person who paid cash for it, for $1000/month for 20 years. After 20 years wealthy person sells home for $600,000. Profit to lower class person: -$240,000 (that's negative $240,000 to clarify). Profit to wealthy person: $540,000.
Conclusion: If you can't pay cash for a home, or anything for that matter, then you are getting screwed no matter what. Your nothing unless you own something. Having a roof over your head is one of the most important factors of life. This is why certain groups of the wealthy make it one of the most controlled, manipulated, and hard to obtain objects. This is a huge factor for how the rich get richer. By holding down everyone else by using everyone else as a means to make them richer. Do you see the cycle? Not all wealthy are to blame entirely for intentionally and directly doing this just because they're wealthy, it's how the system works. But since the system was developed by wealthy people for wealthy people, well....you get the point. Now wake up people.
Jason Magik you are one hell of a dumbass
Cal Lobster No you are
I don't know what numbers you are working with, but this makes no sense.
If you have a fixed rate mortgage you're only paying that $300k... not the $600k that the home appreciated towards.
Sad sack.
great info video... thanks
Good shit. Thanks for the lesson!
Hi, would you be able to reply or anyone that knows the answer to this question. I can get a mortgage for 164,000 and iv got savings. I’m looking to buy a house for 185,000. So can I get that house with my 164,000 mortgage plus the 21 grand I have saved? Thanks
If i understand you right, yes. The mortgage will be for £164,000 and the deposit is your savings of £21,000. Add them together and you got your purchase price of £185,000.
He said about 5 things in his opening statements that I didn't understand, so it was hard to follow.
Look up Dan Frio The Mortgage Man! I found him to be unbelievably helpful with breaking down everything and making it easily understandable!!
Is a mortgage for land only or is it for houses to? That's not a very intelligent way of asking what I'm trying to ask. I'm trying to figure out if it's cheaper to build my own house.
Unless you have about 200k+ I would not try unless your a good builder
Lenders don't like raw land deals. There is such a thing as a construction mortgage though.
George Louis Easiest way to get the answer for a particular property is to ask a good, local appraiser to develop the cost approach for that property.
Otherwise, talk to local builders and see how much they want to build the house you have in mind. Add that to the price of the lot and you have an idea.
Keep in mind that, often, what a builder says it will cost and what it costs when you're done aren't the same thing, it tends to cost more, because you make changes as you go, you might upgrade the doors or the windows, or from vinyl siding to brick veneer, etc.
Generally speaking, if property values are going up very fast (and have done for a while; outstripping the pace at which construction material costs go up), it's cheaper to build than to buy. Usually, that's not the case.
If you don't want to talk to builders and appraisers, use a site like swiftestimator... Appraisers, by the way, use things like Marshall and Swift to estimate construction costs... It's not cheap and has a bit of a learning curve...
If you know a good appraiser, I'd go with him/her.
Thanks Tim, It was presented neat !
Thank you for this information.