Statistics show that the net worth of a homeowner is over 44 times greater than that of a renter. Unfortunately at the same time, the median net worth of renters decreased by 5%.
An easy way to understand this is because homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth by increasing the equity in your home. If you have struggled with saving money on your own, this is a clear solution.
Of course saving to purchase your first home is another struggle so many are confronted with. Having a real estate Agent that knows creative options is crucial. Realtors like myself stay in the know so they can people who think they cannot buy a home.
The lender I work with often, Loan Depot, is the most informed on various types of loans that would only require 3%, 5% or 10% down. This could bridge the gap for many and help them get into their first home.
Once the equity in your home reaches 80/20, the loan could be refinanced and mortgage insurance would removed. This could happen quickly in the ever increasing SoCal real estate market. On Average we see about 7-10% annual growth in value. Not bad considering the bank wont give you 1% on your money in a savings account.
Bottom line, sometimes it is painful to make meaningful financial changes. But in the end, it is so worth it.
