The mortgage industry has changed, morphed, evolved to a great degree over the last 25 years. But with those changes have come opportunities for consumers to realize dreams of home ownership, or even goals of financial security. This will be a brief lesson on some of the processes you should prepare for as you venture into the world of home ownership.
The very first concept that you, as a consumer, should be comfortable with is a simple belief or mindset that I encourage every homeowner to become aware of, or even embrace: In your financial life, there are a few tangible items that will become important to you, and we want to manage those items with equal knowledge and oversight. Let’s talk about them.
Many people grew up with a certain mindset and thoughts of a path toward financial security. But I often challenge my clients to realize that times change, and while we need to understand the past, we need to embrace how we view the future as it pertains to financial security and independence. Many people worked and retired with something called a pension. They contributed for years to this mythical thing and had no control over its value or any role in its oversight. Now, the more popular tool for financial security after work is most often a 401k or some similar vehicle that gives you a chance to manage and impact the growth of the item. Here is where it gets important… most people hire someone to manage the growth and investment of that 401k. It is an asset that you can see, feel and touch, so you understand it. But in our financial lives, the largest or maybe second largest single ASSET you have, besides that 401k, is your HOME.
The paradigm shift that has occurred is one where you should be equally prudent, equally careful, as you manage this asset. The days of a singular focus of paying off your home at the expense of all other financial resources are past. Paying off your home is a noble cause. Many people in previous years and decades past would celebrate this historical event. But today, with the mortgage tools we have available, its simply not a wise financial decision to be singularly focused on that one objective. Think of it this way- would you be happy if your financial advisor put your entire retirement, 401ks and IRA’s and life insurance policies all in the lowest returning investments. Maybe you earn 1 or 2 %, while inflation is 3 or 4% and believe it or not, your wealth is actually diminishing. Would that make you happy? Me neither. So we try to seek out a good financial middle ground. We look to be safe, while also creating a good return. The same needs to be true of how we treat our home. After all… its likely the largest or second largest asset you have. So how do we do that?
Well, first off… we obtain knowledge. We search, we research, we learn, and we educate ourselves. Second- we surround ourselves with knowledgeable professionals who can guide us. And third- we take control of our own security by managing who we do business with, how we do it and even when we do it. After all, its your financial health. Just like your physician can not exercise for you- they can suggest you exercise but its up to you to do the actual work. Same is true for our finances.
At Mortgage Choice, my goal is to help you take your mortgage health, your financial heath, and your ultimate financial longevity…serious. That will be a great step forward as you grow in age, knowledge, wealth, and even prosperity.
How do we do that? Well, you’ve already begun the process. You are reading this information. You have taken the first step in educating yourself about how you can maximize your financial security.