Americans Are Financially Lazy

Seems like it should be surprising but not really. Beside mentality, throw in the variables of mortgage brokers vs direct lenders vs different banks vs changing interest rates and on and on and it’s not too surprising. Buyers tend to think in terms of monthly payments so all the fees tend to get lost in the mix if the payment doesn’t change much.

Hey Frank,

I agree buyers are sold on the monthly payment and not the total cost let alone the fees. Educate your buyers and they will love you for it!

Forgot to mention this, but great video and reminders on how to leverage this mentality to help buyers and us investors. Definitely a good word. Thanks for sharing!

Frank

True. I think it starts with many Americans being financially illiterate. It’s simply not taught in schools (as a basic requirement).

If you listen to some of our elected officials running the gov, they don’t understand biz basics either. Like passing laws to financially penalize companies & think they won’t pass those costs on to the consumer….duh! Can you say…20-30% credit card rates for people with 700+ fico’s.

Anyway, I think when people don’t understand financial issues, they will be “lazy” because their alternative is to study it for a while just to get the basics.

Btw, I was one of those financially illiterate Americans. Never learned it in school. I studied on the web nightly for about a year about home loans, brokers, points, where to buy, indicators, etc.

After all that, I bought in 05 at almost the top of the bubble. At least I got a good loan..lol. NO expert had a clue about the collapse at that time (or at least they kept it to themselves.

Now I’ve spent the last 8 months learning everything I can about REI investing (webinars, youtube, courses, etc) I’ve been working on wholesale lease options, but now we are switching to straight wholesaling.

Anyway, good info.

Thanks,

JvM

Sam,
I am not sure it is laziness I think they don’t have knowledge of how to go about getting a home loan. I
tell my clients to go to a bank that they have done business with in the past and have been treated fiarly by that financial institution. I tell people not to be taken in by a commercial for a loan that they see on TV or the Internet. I advise clients to get someone that you can physically sit across a desk from not a voice on the Internet.

I think if the mortgage lender has to talk to you directly in person that they are more likely not to take advantage of your lack of knowledge about buying a house. Also, if they want me to go along when they meet with the lender I will be happy to do so if they can set up an appointment time. If you have a witness with you that is impartial the chances of getting taken advantage of by a mortgage lender or a banker are less likely. In addition, Realtors or a relative or friend makes a good witness if someone convinces you to do a deal that you really can’t afford.
Shop for a home with someone who is experienced and that you trust and if you don’t understand a phrase or statement demand an explanation of what they said in plain simple language don’t let them talk over your head and agree to something if you do not know what they said. Do business with someone that has a good reputation for being honest.
Ask a freind or relative who financed their home and were they satisfied with the service they received? If their answer is unfavorable check with others till you find the good lenders or good agents that your friend would use again if the the occassion arose again.

Sam,
I am not sure it is laziness I think they don’t have knowledge of how to go about getting a home loan. I
tell my clients to go to a bank that they have done business with in the past and have been treated fairly by that financial institution. I tell people not to be taken in by a commercial for a loan that they see on TV or the Internet. I advise clients to get someone that you can physically sit across a desk from not a voice on the Internet.

I think if the mortgage lender has to talk to you directly in person that they are more likely not to take advantage of your lack of knowledge about buying a house. Also, if they want me to go along when they meet with the lender I will be happy to do so if they can set up an appointment time. If you have a witness with you that is impartial the chances of getting taken advantage of by a mortgage lender or a banker are less likely. In addition, Realtors or a relative or friend makes a good witness if someone convinces you to do a deal that you really can’t afford.
Shop for a home with someone who is experienced and that you trust and if you don’t understand a phrase or statement demand an explanation of what they said in plain simple language don’t let them talk over your head and agree to something if you do not know what they said. Do business with someone that has a good reputation for being honest.
Ask a freind or relative who financed their home and were they satisfied with the service they received? If their answer is unfavorable check with others till you find the good lenders or good agents that your friend would use again if the the occassion arose again.

JVM has it completely right. We are lazy and illiterite. I’ve said for years that the people who own this country want us to remain that way so that they can continue to take advantage of us. Otherwise, this stuff would be taught in schools. Forget loans, we spend more time planning vacations than planning our financial futures. We work 40 years to make a dollar but do not know how to make that dollar work for us, thus we end up, like 97% of us do, dead or dead broke! What a shame.
We need to stop blaiming the government or our bosses, neither of which give a damn about us and take responsibility for our own futures. And finally, what kind of world are we leaving for our kids? If they are to have a fighting chance in this increasingly difficult world, they MUST be educated about how the financial world works. We owe them that.

Hi Sam, I couldn’t agree more. The book, a banker’s secret, was written in 1984 showing Americans how to pay off their mortgage early and save thousands of dollars in interest and unfortunately not too many people took advantage of this probably because they were out shopping for cars instead. Yes, I blame the banks also but Americans have to take responsibility and accountability. Great vid. Thanks for sharing.

Hey Simone,

Thanks for the tip on the bankers secret. I never heard of it however I’m familiar with principal and interest pay down acceleration strategies. Thanks!

This is so true Dan there should be a class dedicated to fiscal responsibility and the truth about credit and our banking system!

Thanks Connie,

I think that is one of the challenges that we lean on others for advice. Don’t get me wrong we should be able to lean towards others greater wisdom, however its not always accurate. That’s why its imperative that we also take the time to learn ourselves and have some fundamental understanding of how financing works.

Thanks Jay,

and props to you my friend for taking the time to self educate. That’s the same way I figured this stuff out myself, no formal education just the school of hard knocks!

Thanks Frank!

Hey Sam,
Great Info! I watch you give as well as model what you give away…absolutely nothing better than this!
Thank you,
Ms. Faye

I’m thinking along the line of lack of knowledge about mortgages and/or fear. As we all agree we were never taught about making money at school. Since I don’t know anything about mortgage rate, I accepted any rate the lender offered me. My first mortgage was at 8.75% and I thought that was a great rate until I bought another house in 1998 with 5.70% rate. Then I saw a talk show on TV about real estate and mortgage rate. That was the beginning of my education about motgage rate. We could offer our help but we should also educate our buyers about mortgage application and what their options are.