LOANS!

I am sorry in ADVANCE my world is totally HOUSE driven right now! May be bad, and I am sorry, but it is what it is! :)
It is pretty much inevitable that at one time or another, everyone will have a loan.  I know there are many out there (Dave Ramsey) that would like it differently, FREAK ALL of us would like it differently, however that is NOT the name of the game. 
I am the first to admit that I have debt in my life, like most

Car
Credit Card
Student Loan
Mortgage

And now as we prepare to embark on another step of our journey we will be obtaining another mortgage with our new home.

I am back in school, and feeling all SMART again! :) lol  or just doing homework.  I have built an amortization schedule.  The HUGE mortgage ;) we were calculating was $50,000, not sure about your area but here that would buy one a VERY VERY VERY run down home.  However as homework goes, we made up the chart then totaled out the total payments made.
This may come as a suprise to some, but when you barrow  $50,000 at 8% intrest for 10 years you will pay a total of $72,796.56 (not inlcuding extra fees) a cost of just over $22,000 for 10 yr.  But now lets change this just a bit

Here we will discuss amortization over a real mortgage at real rates for real periods.

OPTION 1
The average home price in the united states is $280,000
The current Interest rates on a 30 yr fixed mortgage is at 4.625%
Term 30 years
Payment $1,439.59 

Total paid $518.252.40

Difference of $238,252  MORE then price.  Wow that is almost paying for the home TWICE

OPTION 2
The average home price in the united states is $280,000
The current Interest rates on a 15 yr fixed mortgage is at 3.625%
Term 15 years
Payment 2,018.90

Total Paid $363,402

Difference of $83,402  MORE then price.  Crazy what a difference of 1% point and 15 yr can make. 

Other Options
Sadly more often then not there are many other loan options, and many hurt you more then help

If you have ever heard of an ARM or Jumbo RUN.   
ARM: is an Adjustable Rate Mortgage: Not sure if you are aware but interest rates are at an ALL TIME LOW in our country right now.  My parents always talk of buying one of their first homes at a 14% interest rate, nowadays is under 5%.  The ARM does not take advantage of the options available. 

• "Both 2/28 and 3/27 mortgages are examples of ARMs. A 2/28 mortgage's initial interest rate is fixed for a period of two years and then resets to a floating rate for the remaining 28 years of the mortgage. A 3/27 mortgage is typically the same as a 2/28 mortgage, except that the interest rate is fixed for three years and then floats for the remaining 27 years of the mortgage."

This shows you just how SCARY an ARM can be.  If interest rates are always moving, you may NEVER know what your payments might be and it is CONSTANTLY changing. 


Jumbo:
In the United States, a jumbo mortgage is a mortgage loan that may have high credit quality, but is in an amount above conventional conforming loan limits.This standard is set by the two government-sponsored enterprises, Fannie Mae and Freddie Mac, and sets the limit on the maximum value of any individual mortgage they will purchase from a lender. Fannie Mae (FNMA) and Freddie Mac (FHLMC) are large agencies that purchase the bulk of U.S. residential mortgages from banks and other lenders, allowing them to free up liquidity to lend more mortgages. When FNMA and FHLMC limits don't cover the full loan amount, the loan is referred to as a "jumbo mortgage". The average interest rates on jumbo mortgages are typically higher than for conforming mortgages, although not based primarily on credit risk.


Who would want this type of risk? Sadly prior to the Real Estate crisis, this is how lending was taking place, however banks were buying these loans.  Kinda scare don't you think?