This program will help you undo financial bondage.
Home ownership is usually touted as the foundation for and means for all Americans to build wealth. However, those misinformed about the costs of home ownership (including monthly mortgage payment, upkeep, property tax increases, repairs, renovations, etc.), generally have not become wealthy. Many are as debt laden as many renters having purchased more home than they can truly afford. Not to
mention, many of their mortgages are severely under water, owing far more to the banks that hold them than the homes are worth.
It is not automatically true that owning a home makes you wealthier or will do so in the future. Believing this lie that it does and acting upon it without first counting the true cost of home ownership will cost you dearly as it has many millions of people in the past. Believing the lie will move you to do anything to get a house like accepting predatory lending terms with high interest rates and costs. It will also lead you to believe you can afford what the banks say you can afford rather than you making an honest assessment of your finances to know what you can truly afford while building and maintaining a large emergency fund cushion to handle unforeseen home ownership costs and other emergency life situations that may require large outlays of cash in the future.
Home ownership can be great when you truly can afford the home you are going to purchase. It can bring peace from apartment neighbors making noise bouncing off the walls and it could provide more space to entertain friends. Yet, for many millions of people it is not as financially fantastic as the pundits make it seem. The 10-35% federal income tax deduction that one may be able to use with regard to mortgage interest / property tax payments is only useful to the extent that your itemized deductions are greater than the standard deduction for your filing status. The majority of homeowners therefore do not itemize deductions. All the maintenance, repairs, and renovations will not bring greater return for most people given the amount of principal and interest they will pay on the home equity loans and second mortgages they acquire to do these things.
You would say “NO” if I offered you the great deal of giving me $10,000, so I can hold onto it and then next year return to you only $3,500. You should think of home ownership in the same way, so you are totally realistic regarding your financial situation being currently able to handle homeownership. It’s always best to have absolutely no debt and cash needed to purchase a home outright. This alone would help people be much more reasonable about a home purchase. However, if you believe home ownership is worth obtaining a loan to make it a reality then you should follow a few simple rules:
**Pay off all other debt, build at least six months of income as an emergency reserve and also put away enough money in savings to make a 20% down payment at closing.
**Inventory your work environment to ensure you are not subject to bouts of unemployment or reduced monthly income within the few years surrounding a house purchase. Remember, approximately 100% of foreclosures are a result of the purchasers’ inability to continue paying mortgages or property taxes.
**Look to buy a house in an area where the history of home ownership shows steady price appreciation over the last 10 to 20 years, unless the Holy Spirit has specifically told you to move to a particular neighborhood for ministry purposes.
**Only obtain a low interest 15-year fixed rate mortgage and seek to have enough extra cash flow to pay it off much sooner than 15 years.
**Do not purchase any house where the monthly payment (including principle, interest, property tax, and insurance) would require more than 28% of your monthly gross income.
If you will act prudently to do these things you will likely find home ownership to be very kind to you, eventually leading to lower average monthly costs than being a long-term renter and it will not stand in the way of wealth building the Lord wants you to engage in. Remember, home ownership is not the key and being a renter is not a disadvantage. Wealth building is accomplished by honoring God with the first fruits of your income, by continually keeping monthly expenses well under monthly net income, by pursuing debt freedom, and by saving / investing excess cash flow over long periods of time (10, 20 years, etc.).
Matthew 25:26-29, Luke 14:28-30, 16:8-14, Romans 13:8, Hebrews 7:8
Please pray for this ministry and email questions to parlor@ameritech.net and share the links below with others who need guidance. May the LORD bless you richly as you follow His plan!
The book at the link below provides principles and practical steps that help you use the Power To Get Wealth. By 1992, we had $135,000 of debt and a negative $35,000 net worth. Financial bondage and turmoil led me to seek principles and a process for employing good stewardship. As a result, we became constructively debt-free in 1998, mortgage free January 2004, millionaires in 2012, multi-millionaires shortly thereafter, and retired in 2018 in my mid-fifties from public servant jobs while giving abundantly to fund the gospel of our LORD Jesus Christ. The same power is available to you!
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