Should you buy a home in this hot price market?
Solution: Most likely.
In my 34 years in mortgage lending and real estate, owning a home has usually been one of the best investments over the long-term.
Recently Mark Fleming, chief economist at First American Research, wrote, “I think one of the most amazing stats that I’ve come across in my years working as a real estate economist is really measuring the benefits of wealth creation of homeownership. You have to remember that this is a leveraged asset. You buy your home, say, with 5 percent down, effectively that’s a 20-to-1 leverage ratio. Most Wall Street banks would die to be able to do 20-to-1 leverage ratios. If your home goes up by 5 percent, you’ve doubled your money – 100 percent gain – so the wealth-generating capacity is amazing. Just to put some real stats on this, in 2019, in the survey of consumer finances, the median homeowner had 40 times the household wealth of a renter, that’s $255,000 for the owner, compared to only $6,000 for the renter. Homeownership is one of the best sources of wealth creation.”
  • Don’t buy more than you are comfortable paying, yet buy the most you can
  • Don’t overpay too much, some prices are getting crazy
  • I believe home values will continue appreciating for next 12 months
  • Be stable in your job
  • Plan to live in the home for 4+ years to cover costs of selling if needed.
Questions, comments or mortgage loan rate quote, call Dan the Man at 714-310-4162.
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