Saturday, May 29, 2010

Mortgage Help!

Pay attention to price, not payment. That is the basic premise in Mind Your Own Mortgage: The Wise HomeOwner’s Guide to Choosing, Managing, and Paying Off Your Mortgage by Robert J. Bernabe. He presents many scenarios in the book that sound a lot like this: Suppose your mortgage broker calls to encourage you to refinance and save $400 a month. Sounds like a good deal, right? He then leads the reader into some situations where saving on the monthly payment can be costly overall. Even the most uninformed reader would come away with the sense that it is important to be scrupulous in inspecting the details when obtaining a mortgage loan. There are a lot of details and numbers that might cause some readers to become glassy-eyed.

I consider myself to be somewhat savvy with personal finance, and the main ideas in the book weren’t new to me, but I learned a few things, and there was a lot of interesting(?) factual information about the mortgage industry and housing crisis. The author even mystery-shopped some smooth talking brokers whose ads he’d heard on the radio in order to identify some of their deceptive practices!

I didn’t agree with all of his ideas (specifically, the areas where his thoughts differed from Dave Ramsey!), but I agreed with the main ideas in the book. He encourages the reader to shop around for a fixed-rate mortgage by looking at rate and closing costs. He also warns that refinancing can extend the payoff date of your loan, if you just make the required payments. He encourages readers to have a plan for paying off their mortgages early by restricting discretionary spending.

Throughout the book, he directs readers to his subscription-based website, On this site, he has forms available for consumers to use to more efficiently compare loans as they talk with lenders.

I highly recommend this book for anyone obtaining a mortgage for the first time, or who isn’t sure what costs are involved when mortgaging a home.

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