Originally posted at http://blog.mifii.com
Isn’t funny how so of the most mundane decisions make for the biggest impact and conversely the ones we fret about the most can be virtually unimportant.
There is a great talk on Ted.com (http://www.ted.com/talks/catherine_mohr_builds_green.html) which talks all about the choices a couple made when building a new home in the context of environmental sustainability and energy use. I won’t go into the specifics here but the video is certainly worth a look.
In any case the video was designed to demonstrate the energy that goes into building a home and how different decisions have both a smaller or larger effect than we might believe. The parallels with researching mortgages are too big to ignore.
You will hear time and time again from us that the huge focus on interest rates in the context of mortgage research is misguided. Ask the approximately 1 million people who had their homes foreclosed on them in 2010 if they were worried about the interest rate on their mortgage.
In fact 25 points .. the difference between 4.75% and 4.5% amounts to about $9 a week on a $250,000 mortgage. The industry becomes fixated on the difference over 30 years, which is a bigger number, but is a bit like the fact that people spend about 3 months in the shower over the same 30 year period. It’s an interesting fact, a big number when you say it that way but in the grand scheme of things far less important than other factors.
When you take out a mortgage, or build a home for that matter, it’s important to ask the right questions and focus on the right data. This will relate to your personal situation as much as the world around you.
Mifii will be releasing tools in the summer of 2011 for US consumers to better understand their mortgage, we welcome early sign ups to our private beta, just get in touch.