Buying your First home
In the 1980s a Real Estate wealth course was being given by a gentleman my father introduced me to. He was winding down, and I started doing a similar presentation. As rates were going up it was easier to talk about the evils of mortgages. When rates declined banks insinuated themselves into the Real Estate sales industry. Today mortgages, and Real Estate sales, are hand in hand.
This is a sales trap that you need to be more aware of. From 1980 to today we have had massive inflation, and home price appreciation. It’s my opinion, those days are over, and you will need to be smarter about your approach to a First Time Home Buyer purchase.
At today’s prices you still need the mortgage. What you also need is to pay off the mortgage, or pay it down to get equity. Equity has been an appreciation gift these past twenty five years. We will be paying for that for some years to come. So, you need to settle on a loan amount you can pay off. This means, once again, your dream home may be a few years off. Once again, as has been the case since the Great Depression, you will need to trade up.
In the next few months I will promise to post more about your ability to trade into a very nice home to raise the kids, but in the mean time you are going to have to work for it. You are building an estate to leave your children, or a nest egg to travel, and enjoy retirement.
So, you are buying a property of value, that you can pay down the principle balance on. You want a thirty year fixed mortgage, and with any extra money you throw at the principle balance. If you can double down your mortgage payments you will save hundreds of thousands of dollars, do the math.
The first home purchase needs to have a value. If you look at the www.FixerFixer.com site you may find something that gives you an idea of what constitutes value. Maybe I’ll do a post over there about that.
I’m just saying, be smart, buy low, so you can sell high. As always, if you have questions, I have a secure e-mail page you can use for confidential advice. There is a button at the top of the page.