A few days ago I heard the statistic “63% of most people’s net worth is in their home” and it made me think of a quote by Will Rogers, the actor, who once said, “Don’t wait to buy real estate. Buy real estate and wait.” That statement is true now more than ever. According to the Census Bureau, homeowners on average have a net worth that's 80 times higher than that of renters.
If you’ve owned your home for five years or more, you have contributed to your future without even thinking about it. As long as you’ve paid your mortgage each month, you’ve built equity plus your property value has most likely increased giving you even more net worth for your financial future.
If you don’t own your home, now is the time to buy. If you wait, inflation guarantees that you’ll
be paying a lot more money for the same house. Buy what you can afford now and in five years or so you’ll have enough equity to move from your starter house to a house more suited to your lifestyle. This is the time to start wealth-building.
Paying your mortgage gives you equity. Equity can be a financial tool. It can be an easy source of funds when you need extra cash. You can access your equity through second mortgages, home equity lines of credit or cash-out refinancing. People have used their equity to consolidate other debts, pay for their child’s college education, pay for home improvements, and even buy investment properties.
Also, if you’re 62 or older, you may qualify for a reverse mortgage and use the equity in your home to supplement your income, buy a motorhome, travel or buy a vacation home. You can even sell your home, use half the money for a down payment on a new home, keep the other half in the bank and get a reverse mortgage on the new home with no monthly mortgage payments! Additionally, if you are 62 or older, have significant equity and are facing foreclosure, you should immediately explore the possibility of a reverse mortgage. There is no reason to struggle when you may be able to skip the mortgage payment and generate some cash flow.
Real estate is much more than just a roof overhead; it is a great investment that contributes to long-term savings and helps us accumulate wealth as we age.
The information on this blog is based on my personal opinion and experience, it should not be considered nor is it intended to be professional financial investment advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. My thoughts and opinions will also change from time to time as I learn and accumulate more knowledge. All information is provided “as is” with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information.