What are the risks of taking out a mortgage?

Taking out a mortgage is a big decision, and it comes with a number of risks. In Washington, the most common risk of taking out a mortgage is the potential for foreclosure. If a homeowner stops making their mortgage payments, they can be at risk of having their home taken away by the lender. Another risk of taking out a mortgage is the potential for a falling housing market. If the value of a home falls, the homeowner can owe more than it is worth. This means the homeowner would have to bring money to the closing table in order to pay the remaining balance. The interest rate on a mortgage can also be a risk. If a borrower gets a mortgage with a variable interest rate, the payments could suddenly increase if the interest rate goes up. This could make it difficult to stay current on their mortgage payments. Lastly, mortgages often come with high fees. These can include origination fees, closing costs, and other fees which can add up quickly and put a strain on the borrower’s pocketbook. Overall, it is important to carefully weigh the risks and benefits of taking out a mortgage before making a decision. Knowing the potential risks could help avoid any surprises or bad financial situations down the line.

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What are the risks of taking out a mortgage?

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