The show: The Office
The situation: As Michael Scott is about to sign the final paperwork to purchase a condo, he realizes it will take much longer to pay off his mortgage than he thought.
Dwight Schrute: "What kind of mortgage did you get?"
Michael: "Ten years."
Real estate agent: "Well, 10 over 30, a 10-year fixed (term) over 30, so 30 years total."
The problem: Michael tries to back out of the deal, but his real estate agent explains that he’ll lose $7,000 if he cancels the contract, so he moves forward with the purchase.
The lesson: Understanding the terms of an agreement is an essential part of being a smart consumer. In fact, the mortgage crisis was blamed, in part, on buyers not understanding their mortgages.
Since the crisis, there has been some effort to increase transparency and consumer protection, but the onus is still on borrowers to educate themselves about major transactions.
"You bust your (rear) to make (money), so you need to resolve to treat it with the respect it deserves," says Gail Vaz Oxlade, author of Debt-Free Forever: Take Control of Your Money and Your Life and host of the television series Til Debt Do Us Part. "And that includes reading the fine print and understanding the terms of any loans or credit you’re signing on for."