There are many reasons, both financial and non-financial, that homeownership remains an important part of the American Dream. One of the biggest reasons is the fact that it helps build family wealth. Recently, Freddie Macwrote about the power of home equity. They explained:
“In the simplest terms, equity is the difference between how much your home is worth and how much you owe on your mortgage. You build equity by paying down your mortgage over time and through your home's appreciation. In a nutshell, your money is working for you and contributing toward your financial future.”
They went on to show an example where a person bought a home for $150,000 with a down payment of 10% ($15K), resulting in a loan amount of $135,000. The buyer secured a 30-year fixed-rate mortgage at 4.5% with a monthly mortgage payment of $684.03 (not including taxes and insurance). The chart below demonstrates the home equity built after 7 years of making mortgage payments and assuming the historic national average of 3% per year home appreciation:
And that number continues to build as you continue to own the home.
Merrill Lynch published a report earlier this year that showed the average equity homeowners have acquired by certain ages.
Home equity is important to building wealth as a family. Referring to the first scenario above, Freddie Mac explained:
“Now, if you continued to rent, and made the same payment of $684.03 per month, you'd have zero equity and no means to build it.Building equity is a critical part of homeownership and can help you create financial stability.”
Put your housing cost to work for you and your family. Meet with a real estate professional today to explore your options.
Author:JP Piccinini Phone: 480-980-9025 Dated: November 23rd 2015 Views: 1,115 About JP: JP Piccinini is CEO and Founder of JP and Associates REALTORS (JPAR), Founder and CEO ofOdasi Real E...
JP And Associates REALTORS (JPAR) is one of the top 100 independently owned brokerages in the US. A full service real estate brokerage firm specializing in real estate sales and marketing services with multiple offices across the US and expanding quickly. JPAR is also one of Real Trends top 500 Brokerages in the US for volume and sales and in the top 1% in the US for sales.
Our mission is to provide extraordinary services and exceed our clients’ expectations by always committing to the highest levels of professionalism, ethics and standards in the real estate industry.
JP and Associates REALTORS is a real estate company with a solid structure and foundation built around service and productivity. We believe in providing a fun and rewarding environment for all our REALTORS® and therefore always ready to support our REALTORs® Associates in any market and in any condition. All our REALTORs® will always strive to close more transactions in a given year than the average REALTOR®. Our goal is to recruit and retain the most professional, better trained REALTORs Associates in the local market.
If you are interested in a new career in real estate or already have a real estate license but wish to learn more about our company please contact us directly to set up an interview. We offer our agents a 100% commission plan, company leads, training and mentoring and coaching from TOP Producers with no office, desk fees or monthly marketing fees ever. We are a full service brokerage at a transaction fee cost.
At JP And Associates REALTORS we strive to exceed our Clients AND our Associates expectations.
General Inquiries: firstname.lastname@example.org
Office Number: 1 (800) 683-5651
Texas Real Estate Commission Consumer Protection Notice