P
punter2005
Guest
This is a quote from Clubman:
If a risk analysis is done when taking out a mortgage, the two major risks factors are:
1. Financial circumstances could worsen considerably during the lifetime of a mortgage e.g. due to unemployment, illness, divorce, etc.
2. Interest rates could rise substantially during the term of the mortgage.
To me, taking the longest mortgage term offered is one way of mitigating these risks. I would tend to give the opposite advice to Clubman:
I'm (obviously) not a financial advisor. I'd be interested to hear from other seasoned financial people as to why they agree (or not) with Clubman.
You should ideally start out with the shortest mortgage term possible even if you accelerate repayment later as well.
If a risk analysis is done when taking out a mortgage, the two major risks factors are:
1. Financial circumstances could worsen considerably during the lifetime of a mortgage e.g. due to unemployment, illness, divorce, etc.
2. Interest rates could rise substantially during the term of the mortgage.
To me, taking the longest mortgage term offered is one way of mitigating these risks. I would tend to give the opposite advice to Clubman:
Take the longest mortgage term offered and then accelerate repayment - paying off the mortgage as soon as possible.
I'm (obviously) not a financial advisor. I'd be interested to hear from other seasoned financial people as to why they agree (or not) with Clubman.