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It Pays To Own A Home


By Broker, Owner

It Pays To Own A Home

I tout the big three reasons to buy a home: #1. Pride of ownership appreciation; #2. Tax benefits and #3. Appreciation. There is a 4th though that may well trump them all.

I have had the pleasure to work with many, many private money investors for more than 20 years. These are men and women who have made their fortunes in a variety of ways and lend those funds to borrowers who have equity in a property and an ability to repay the loan.

Many of them have told me that the day you can retire is the day you pay off your home. That is a very future minded goal. It’s difficult to see when you are 29 years old, have 2 kids in diapers, own your own boat which you never use because you have 2 kids in diapers, credit card debt, and a car payment of $329 per month. Plus you have to buy all those diapers! And handi-wipes. And little sets of clothing. And teeny-tiny shoes.

But if you had the good sense to buy the home you live in, then all of a sudden – and believe me as a Grandpa it’s all of a sudden – your kids are grown up and now in college and you’ve paid 20 years on that mortgage. Then a bit later on, you no longer have the kids at home, you have a bit of extra money and can start throwing it at the mortgage to get it gone. So say at age 55 you no longer have a house payment. Priceless!

My Dad bought a home in Chandler Loan Originatorzona in 1968 for $16,900. He took out a 30 year mortgage with a monthly payment of $159. With 7 kids at home, the payment was difficult for him to afford at that time. But what strapped him in 1968 was almost a breeze in 1978 as his and Mom’s incomes had risen. It was even easier in 1988 for the same reason. After another 10 years Dad finally paid off their 30 year fixed rate loan. No house payment and a very low property tax basis on their home.

You cannot accomplish the above as a renter. Here is some astonishing math. Let’s say your rent is $1,300. In 30 years you will have paid $468,000 on some other guys mortgage. That’s if rent over 30 years stays at $1,300. I bet not. Let’s say it goes up $250 every 10 years. That’s $570,000.

Those numbers alone should compel you to figure out how to be a buyer, but there is more. Ever been told you have to move because the landlord is selling the home? Or the rent increases come quicker than $250 every 10 years?

Buy a home and let it work for you, quietly in the background, being paid down, increasing in value, until that glorious day arrives when the mortgage is no more! Then retire.


Owner- the Guy in the White Hat – is a CA DRE Broker with more than 23 years of experience in real estate and lending. His phone number is (707) 523-2099. Email is Broker@sunpacmortgage.com. See website @ www.sunpacmortgage.com.


Will Rogers, world famous humorist in the twenties and thirties, said, “buy land, they ain’t making any more of it.” Land back then was dirt cheap, especially during the Great Depression. History repeats itself and now you have the opportunity to make it work for you.

The Median Price has gone from the bottom of $305,000.00 to $350,000.00 in February 2009 up to $350,000.00 by end of May 2009. The number of foreclosures on the market in Santa Rosa has gone down from 350+- in November and December 2008 to 101 as of last Thursday.

You know, A LOT of people made money during that Great Depression. How? They did not follow the pack. This is very hard to do. The best managers of money (Boone Pickens, Warren Buffet, and Bill Gates – for example) are a different breed of cat. They seem to operate opposite of the crowd. They buy when no one else is and they will freely tell you to do the same. It takes a brave soul to not follow the crowd.

There are statistics that show things are not as bad as they seem. In Sonoma County home sales are up – way up. First time buyers can finally afford to buy and they are. There are multiple offers on many homes. Homebuyer loans are getting approved and people are moving into these homes. There are not as many homes on the market as there were at the peak in November 2008, which will serve to drive the prices up.

The moral of the story is – “buy land, they ain’t making any more of it.”

Owner is a CA DRE Broker with over 20 years experience in real estate and lending. His number is (707) 523-2099. See website @ sunpacmortgage.com.

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