July 11, 2012

THIS is what home ownership is all about

July 11, 2012

THIS is what home ownership is all about

Check out these borrower stats a fellow loan agent shared with me last week. I’ve been mulling them over in my head ever since:

– 65 year old borrower owns 6 properties: 1 primary residence and 5 investment properties, two of which are vacation rentals so he can use them for his own leisure time as well.

– Owns 3 of the 6 properties free and clear, including primary residence where he’s lived 35 years

– Total debt-to-income ratio is a very low 14%. That includes 2-year average net income from job as independent contractor and also net positive income from investment properties (more on debt-to-income ratios here).

– Refinancing all 3 financed properties to optimize rates.

– His primary residence is worth $125,000.

– Total value of all properties $2,255,000.

– Total debt $718,000, and he’s paying it down $100,000 as part of this refi process so he’ll have 73% equity in his properties and $250,000 in cash.

So what can we take from all of this: Yes his job enables him to improve properties for less cost than many. But it’s not a high income job, this is an average guy. It’s not the job led to this exemplary home ownership profile. Just a long term view. No greed. No burning desire to live in a trophy home. Blending the need for a place to live with desired lifestyle (vacation homes) and investment strategy.

This is a model citizen, and this is what home ownership should be all about.