A LARGE DOWN PAYMENT IS DEAD EQUITY
You can lower your monthly mortgage payment with a larger down payment on a home. Think cash is king. You never know what the future brings. One has to sell to regain that cash.
At today rates, each $1000 in cash invested, a mortgage will only be reduced by approximately $.4.50 cents per thousand per month.
Dead equity occurs as real estate property increases in value natuaraily. In the Houston area, over a certain time period, an average property may increase at a 3.5 rate annually. The actual cash originally invested up front is stagnant, it does not increase, it decreases.
It is interesting to know that, the first seven years of a mortgage is that time that maximum interest is gained by the lender. Lenders wish that you sell every seven years. That money is then lent on a new loan which will earn the lender maximum interest again and again. An average home Buyer sells every 7 years. You think the scale is weighted in favor of the lender. The point is, many times the cash return from a lower mortgage takes longer than 7 years for the homeowner benefits. The major purpose of home ownership is shelter first, investment second, future sale ability and a number of other conditions. The right Realtor really is most important.
If you want to learn more, get great guidance with your home pursuit, call the SnippSnapSold team. Doris or Brandy, 832-877-1040
