Sunday, October 25, 2020

I’ve been thinking a lot about our current economic environment. Mortgage rates drop and that creates an opportunity to lower your payments, build equity, sell your house (great time) and trade down, possibly walking away with cash, having less responsibility and a lower payment, or trade up for more space at possibly the same payment you are making now or with an increase in mortgage payment and taxes.

I have assisted borrowers with mortgage advice for over 30 years and the one conclusion I have come to is that King Solomon (Shlomo Hamelech) who wrote Kohelet (Ecclesiastes) was correct. Hevel Havalim (vanity of vanities). “Happiness is to be found in being, not in having.” “If only” is what I have to say. Easy to say, not easy to ingest.

Wealth is personal, and if you are blessed with wealth, enjoy it and may you be guided to use it wisely. This article is really for those on a tight budget. While it says in the Torah “Thou shall not covet what your neighbor has,” it seems that while the word covet is quite a strong word, many want what the “Joneses” have. Human nature is human nature and obviously God knew the challenge we regular folk would face.


Where does the the challenge begin? Is it we see someone building a mini mansion and we start thinking, “I want one,” or that our house is too small? Is it that our kids go to their friends’ house and now want you to get a pool? Is it that if you stay home in January your kids think poverty has hit? Can it be that you only have an iPhone 7 and no MacBook Air? Home for Passover, huh? We talk and single out the cost of private education and call it a tuition emergency, but the reality is that everything is expensive, such as camp, tutoring, food, utilities, health insurance and, last but not least, owning a home. I’m not even talking about money, or affordability, but I’m talking about the new (at least to me) expectations that are the new normal surrounding us. What have we created? Or the bigger introspective question is, did we allow our outside surroundings to create us?

I believe the challenge is not so much about our adult desires. Let’s remember, who is happy? One who is happy with his lot. I am. You may be, but the real challenge is trying to convey that to our children. The real challenge is that we love our kids so much that we want them to have what everyone has. Let me repeat, we want our kids to have what everyone has, and there lies the pull, the challenge and the rub.

If you have the money, great, sharing is caring, but if not, trying to live like the Joneses may be stepping in quicksand. Look at our economic history in the last 12 years and you’ll see nothing is guaranteed, nothing! Neither wealth nor health.

In my opinion, if you are on a budget, now is the time for economic preparedness, not stretching to more unless you realistically and currently have the means, or are on an accelerated financial earnings path.

While my point may seem contrary to the mortgage lending industry norms, which are always touting the advantages to borrowers to borrow more and more and more and buy larger and larger homes, or buy another vacation home, it is precisely the point I do want to make. We have lived in economic uncertainty for quite a while. Now may be a good time to save, consolidate debt and lower payments, pay down an existing mortgage and build equity in your homes. It’s a time to really think about how to best use the money you borrow. I don’t believe it is a time for increasing debt without a carefully calculated reason and payback. In the end I do believe that “less is more.”

Carl E. Guzman, NMLS# 65291, CPA, is the founder and president of Greenback Capital Mortgage Corp. NMLS# 5668. He is a real estate mortgage banker and business financing expert with over 30 years’ experience. He currently has 190 five-star reviews on Zillow. Carl and his team will help you get the best mortgage financing for your situation and his advice will save you thousands! www.greenbackcapital.com, [email protected]