EQUITY. For young buyer's, attainable if you work at it!
Many years ago, I bought my first home at age 20. My grandfather offered me the same solid advice he provided his children. It worked for him and still stands the test of time. Starting with your very first payment, add a little extra. In his time it was only cents and dollars. He followed his own advice and paid off every single home early. He kept many of them and was able to enjoy a long life, free from worry.
Simple formula really. You have a $100,000.00 loan (realistic price in much of the nation today); add an extra $100.00 per month to apply to principal. In the course of a year you have paid $1200 and over the course of 5 years have reduced the principal an additional $6,000.00. This is above and beyond your normal scheduled reduction. With that formula you will have reduced your principal balance almost $15,000.00 in five years. If you keep this up for another 5 years your loan balance would be under $63,000.00. You are now talking some serious principal reduction, equity retention and complete ownership in a very short time.
This is what real estate was originally about. Staking out a place to call home; to own the land and everything thereon. A place to dig in and build your life. But most importantly, having control of your equity gives you the power to make choices, the least of which should be the power to borrow. Having free & clear properties gives NO lender the power affect and control your life.
While this is not for everyone and our percentage of homeowners is dropping. Homeownership will still be the life of choice for the majority of people. For those, I welcome you to the ranks and Bravo for stepping on board.
And to my grandfather, Emery Lorance. Thank you.