Title: "Mind Your Own Mortgage: The Wise Homeowner’s Guide to Choosing, Managing and Paying Off Your Mortgage"
Author: Robert J. Bernabé
Publisher: Thomas Nelson; 320 pages; $14.99
In the last year, I’ve reviewed books about how we got into the mortgage crisis. I’ve reviewed books that proposed how the government should act to prevent it from recurring. You’ve seen my reviews of books on the new, post-bubble rules for qualifying for a mortgage, and books on how to pull off a short sale or avoid a foreclosure.
But where are the books that simply teach sound, untricky, best practices for selecting your mortgage and managing it wisely over the long term? That seems like the sort of mortgage manual most Americans could really use, no?
Eureka. I think I found it.
Written by Robert J. Bernabé, a finance-industry veteran and personal-finance church minister, "Mind Your Own Mortgage: The Wise Homeowner’s Guide to Choosing, Managing and Paying off Your Mortgage" provides a soup-to-nuts reference and instruction manual for a homeowner’s entire mortgage lifecycle.
Grounded in values like simplicity and the preference for the ever-more-popular "plain-vanilla" mortgages, the book both reflects and helps readers live out the new trend toward frugality, risk minimization and sustainability in all matters personal finance.
In fact, somewhat audaciously for the mortgage industry, Bernabé expressly rebukes the "never pay off your mortgage" mantra, which grew so popular in the 1990s for the diametrically opposed view: plan to, and then do, pay it off — and fast.
Whether it jives with their personal financial perspective or not, readers are certainly more primed now than ever to see some wisdom in this admittedly conservative approach after watching their neighbors and relatives scramble to keep pace (or not) with rapidly changing mortgage obligations. When it comes to mortgage these days, safe equals good.
And simple equals good, too. Bernabé kicks off the book with a basic outline of the credit crisis, simplified to eliminate all policy-based wrangling about bailouts and buyouts, preferring to keep the explanation of what happened on Wall Street uber-brief and spending much more time on what happened on Main Street — the details that empower readers to prevent a repeat.
Bernabé illustrates a clear example of how a sound household financial plan will evolve over time into an increasingly comfortable prosperity — with a plain-vanilla mortgage, the practice of giving and saving off the top, and an allergy to consumer debt as its cornerstones.
The author compares this with a sketch showing how the too-common financial profile of an American household — including debt that increases with every pay raise, and incessant refinancing to get a lower payment — spirals out of control. It’s pretty powerful stuff, up front, especially for those among us who have a hard time seeing the long-term impacts of habitually satisfying the craving for instant gratification when it comes to spending, debting and the like.
The book offers a heavy dose of this sort of deprogramming and dismantling of common mortgage beliefs, like the thought that refinancing into a lower-payment loan "saves" money every month; Bernabé shows that, more often, the refi only adds years to the payoff date and any "savings" is not saved, but rather spent in the monthly course of things.
Similarly, Bernabé attacks the very concept of what we Americans see as "wealth" and "riches" and submits that to a shift to prioritize possessions that are adequate, rather than uber-luxurious, will likely both save many Americans from financial ruin and plain old unhappiness, as we realize that the best things in life aren’t things at all.
Given that mindset, it only makes sense to take a proactive approach to wisely manage and, sooner than later, eliminate, our largest debt: our mortgages.
Bernabé offers tools for every phase in the life of a mortgage, from hard-core mortgage shopping that boils down to a concern for cost (rates and fees) above payment, to eschewing refinancing unless there is a significant savings that will actually be either saved or used to pay the mortgage off even faster, and a fairly un-American emphasis on monitoring and aggressively chipping away at the mortgage payoff date.
The book offers worksheets, decision-making rules, and some very cool paradigm-shifting chapters on avoiding mortgage gimmicks, personal finance tips that run counter to the popular trends, and the tradeoff of your time and money inherent in debt — tools are also available in more user-friendly form on the companion website, www.MindYourOwnMortgage.com.
The one point with which I must beg to differ with Bernabé is his position that mortgage brokers offer no advantage over working directly with a bank — any real estate broker who has tried to close an FHA loan in 30 days or needed to write a preemptive offer on a Sunday and needed a fresh approval letter before they could submit will understand where I’m coming from.
But the rest of this book contains material so simple, sound and strong it would actually make a very good gift for almost any homebuyer, newlywed or new homeowner — it’s the housewarming gift that could actually help the new owners keep the house, period.