Did you know – The moon and Earth are constantly moving along their own orbits so, on average, the moon is about 238,855 miles from Earth. I bring this up not to educate people on space exploration, but because I heard an interesting stat related to the Apollo rocket. The Apollo rocket to the moon was only on course 3% of the time. For every 30 minutes of travel, they were only on course for 60 seconds.
Destinations in life are never a straight line. With the start of the new year, many take upon themselves new resolutions, but more often than not, they end up fizzling out after a few days or weeks. In every aspect of our lives – health, finance, education, relationships, etc. – “in-flight” corrections are needed to keep us on track.
I read a great book recently called “The Slight Edge” by Jeff Olson. Olson does a remarkable job outlining how simple everyday action steps will compound into significant results and benefits if done consistently. One example of this is reading 10-15 pages of a book every day. In doing this consistently, one will read at least 10 books over the year. He talks about moving the needle “one point” every day, which will ultimately lead to tremendous change.
So what’s the point of sharing this information? There is no one-size-fits-all when it comes to buying or owning a home. Even if one were to get a low-interest rate mortgage when they purchased their house, without an annual review, one might be off their “financial trajectory” given the specifics of their current circumstances.
I can take this one step further. As rates have been creeping up over the past few months, one of the most common things that I see occurring with a lot of other mortgage companies is how they began to charge “points.” For those who don’t know, a point represents 1% of the loan amount. If someone is borrowing $500,000.00, that is an extra $5,000 in fee for closing. I have seen as many as three points charged to mortgage applicants when they went with other companies.
In conversations with some of these people, they admit that they were so excited to see the low-interest rate that they didn’t focus as much on the fees. Some were told it’s a “buy down” to lower the rate without being shown a breakdown or a break-even point.
One person I was speaking to was liquidating a retirement account and being penalized for withdrawing the money because his costs were higher than anticipated. People are also being charged points to “rush” a loan and being told that there are higher fees to expedite the process. That’s ridiculous!
My point in all this is to make sure that you align your mortgage with your overall short-term and long-term financial objectives. The slightest adjustment in your financial circumstances (better or worse) can have a long-lasting impact. In a competitive environment such as the one we are in now, your small decisions have tremendous consequences.
Shout out and happy birthday to Micky Bromberg, Orly Chen, Aviva Distenfeld, Gitty Eisner, Jordan Glick, Rabbi Yossi Kaufman, Yehuda Kohn, Adam Lazaros, Eli Lipner, Mirlana Morris, Josh Rovner, Rivka Silverman and Zohar Zamir.
Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Approved Funding is a mortgage company offering competitive interest rates as well as specialty niche programs on all types of Residential and Commercial properties. Shmuel has over 20 years of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. He can be reached via email at [email protected]