The Pros and Cons of a Mortgage

mortgageA mortgage is a long term commitment in the form of an agreement that is signed between the two parties who are the buyer and the seller of the home. Now there are a number of advantages and disadvantages associated with the mortgage that comes to an individual

Now first lest us talk about the several advantages that the mortgages come with-

  1. Cost effective borrowing

This is one of the benefits of the mortgage which is that the interest rates of the mortgage are usually lower when it is compared to those of the other types of loan borrowings.

  1. Tailored borrowing

While going for mortgage you get a variety of options to choose from. There are various choices of mortgage types like the tracker, fixed rate, variable rate or discount mortgages. Thus you get more number of choices of finding the right kind of mortgage deal for you.

  1. Longer term mortgage

Now days, instead of the 25 years mortgage one can choose the 30 year mortgages. This way the cost of the house purchase is spread over a longer time period. This in turn means that you have you pay less for your monthly payments.

  1. As an investment

Mortgages can be considered as long term investment. This means that when you pay mortgage that is something that you will eventually owe one day. It’s more like renting an equivalent property while you are outgoing on a mortgage.

Now let us talk about the several disadvantages that it has-

  1. Debt

Taking out a mortgage means taking on debt. You are going to borrow money in the form of loans. Now sine loan always come with some interest rates, when you are buying something on mortgage you promise to return that money along with the interest added. This way you will end up some extra money that what you borrowed initially.

  1. Secured loans

This is yet another major problem. That if the person who is dealing with a mortgage isn’t able to keep up with the loans may eventually lose their homes. This is mainly because the mortgage is secured against that property which is being bought.

  1. Additional fees, charges, add-ons

Mortgages come with some extra cost as well. For example valuations fees which may include additional fees lie charges, add-ons etc. when all of these are added together, it can add up to a significant amount of money. 

  1. Potential foreclosure

For situations in which you get caught up in an unexpected financial crisis, and are not able to pay for your loans, may end up facing face foreclosure. Now although there are a few lends would still work with you to ward off this situation, there are theirs who would take legal action against you.


Thus the mortgage comes with several pros and cons. And it depends entirely on the person and their financial station whether they want to go for it or not.


Hey Folks! This is Michelle Kammryn I live in Alaska, United States. I'm 30 years old an entrepreneur, blogger, and writer who talks about Finance, Maney Saving, Investment, and Businesses, etc. Read my latest write-ups.

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