A recent book by financial adviser Doug Andrew is called Millionaire by Thirty. Here are some edited excerpts in regard to home ownership...
“The millionaire mindset is that you should not rent for any longer than absolutely necessary....If you currently pay rent on your house or apartment rather than owning it, you’re tossing away money. There is no way to recoup it. You get nothing beyond your shelter....2006 Census Bureau data indicated that 25 percent of those currently under age 25 own their own home....A person paying $800 in monthly rent could probably afford to make a $1,000 monthly house payment (25 percent more), because the homeowner gets to write off mortgage interest (but also needs to pay for property taxes and homeowner’s insurance....
Three ways to buy when you don’t have cash for the down payment (DP):
• Borrow the DP (or the entire purchase price) from the seller, and pay them a higher interest rate than they’d earn with a CD
• Borrow the DP from a relative
• Satisfy a DP through a second mortgage
You may also be able to lease a house with an option to buy, paying an extra $100 or $200 a month during the term of the lease: usually one or two years....Your house may—or may not—appreciate in value over the years. Traditionally, prices go down mainly on expensive homes, but rarely on starter homes, which cost less and exist in a more conservative marketplace. There is almost always demand for starter homes in a college town.”
