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iQuestions Faculty, Ron Blue 
 
 
Question: 
 
What are the most important factors to consider when taking out a 
mortgage? 
 
Answer: 
 
When people take out their mortgage for the first time, or even in 
subsequent times, there are a couple of things that you need to 
consider. First of all would be what kind of mortgage, and there are a 
lot of different kinds. There’s fix-rate mortgages, there’s interest-only 
mortgages, there’s adjustable-rate mortgages—and the terminology 
can be confusing.  
 
My recommendation, when it comes to a mortgage, is that I’m always 
better off to live with certainty than uncertainty. So, if I take out an 
interest-only mortgage, I might be able to afford more house in the 
short term, but I’m living with great uncertainty, because I’m making 
no commitment to the principal, the equity, in the home. So, I would 
avoid, in almost every case, an interest-only mortgage.  
 
I would also avoid adjustable-rate mortgages—unless you intend to 
pay it off within the first adjustment period. Sometimes people will 
take out an adjustable-rate mortgage with a five-year term on it, 
understanding that they’re going to pay that mortgage off in five 
years. That’s an okay thing, because they get a lower interest rate on 
the short term. 
 
So, I think when it comes to a mortgage, you want the shortest term, 
the lowest interest rate, and a fixed payment—those are the best 
options. 
 
 
Now, in the financial services world, you’re going to get a lot of 
controversy on this, because people are going to say, “Well, if you 
lower your payments, then you can invest the difference.” My 
experience has been that most people, when they lower their 
payments, they spend the differences as opposed to invest or save the 
differences. If in fact you have the ability, the discipline, the 
accountability to invest or to save the difference, that’s another 
matter. Very few people have that discipline.  
 
I would rather be fixed on what I have to pay, know what it is, get it 
paid off as quickly as I can, and have a home that is debt-free.  
 
You know, there are a lot of people who think that having a mortgage 
on a home is a good thing. I have never yet seen anybody who has 
paid off their home mortgage that didn’t feel really good about it. So, 
plan on paying your mortgage as fast as what you can—that’s the best 
kind of mortgage to have.  
 
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