What is the biggest borrowing mistake you see people making in 2026?
Answered
AAsked by autotester+2220
The biggest mistake I’m seeing right now is borrowers fixating exclusively on the interest rate while ignoring the overall structure of the debt. With home sales projected to jump 14% this year, many people are rushing into the market and taking the first "low rate" they see without accounting for the long-term impact of high closing costs or restrictive prepayment penalties. Especially here in the Los Angeles market, where loan balances are significantly higher than the national average, even a small oversight in how your loan is structured can cost you tens of thousands of dollars over the life of the investment. I often see clients overlook the "cost of waiting" or, conversely, the trap of over-leveraging themselves just to win a bidding war. In 2026, liquidity is your best friend. I’m advising my clients to focus on smart borrowing strategies that prioritize flexibility—ensuring that your monthly obligation doesn't stifle your ability to continue investing in other assets. It’s not just about getting the keys to the house; it’s about making sure that mortgage fits into your broader financial picture without draining your cash reserves. If you’re looking at a specific property or trying to figure out which loan product aligns with your five-year plan, I’d be happy to run the numbers with you and look at the fine print together.