My son's friend Ty (they met in high school) returned form the
Navy partially disabled from time on a aircraft carrier. Even
more surprising was he came home with a wife! Together these two
set about surviving. Doing what young couples do, eventually
along came a daughter, a baby not to be reviled until (if) our
kids present us with grandchildren.
Ty is a hard worker, who always exceeds expectations, but never
has and may never make much money. High rents, a second story
walk-up in a noisy four-plex,and a high traffic project had Ty
wanting a home of his own. REALTOR®, after REALTOR® told him he
couldn't afford a home. Turning to his high school friend, my
son, a mortgage broker with my office, he asked for help.
Ty's was not going to be an easy project, he had low income and
9 jobs in the eighteen months he'd been out of the Navy. With
the help of a hungry, and friendly REALTOR® they found a small
three bedroom starter house with a pool. During escrow (the
closing process in the west) Ty changed employment twice more.
During job 11 we went to documents, and Ty changed jobs again!
Countrywide backed out of the closing, 11 jobs yes 12 jobs no!
Two weeks of hustling and we finally closed with a new lender,
Ty owned his own home for $87,500.00.
Ty's first payment was due 50 days after closing, before he
could make the payment Countywide bought his loan. Today many
years later we still take flak from him about making payments to
the lender that backed out of closing.
In my book "One House At A Time / Finding And Buying Single
Family Rentals" I explain everyone can own their own home. I
also explain why you should always work with a good mortgage
broker. All the REALTORS® and their lenders who said Ty could
never own his own house were right, they could never get him
financed! Many a family will never get their own home simply
because their help is either unwilling to do the work necessary
or incompetent to do the job. Ty's family got their own home
because my son, Eric is an exceptional mortgage broker. Ty would
like to think that he got special service, he didn't. Eric, like
most mortgage brokers will do the same for anyone who's loyal to
them and tells the whole truth.
This is a story of a working man's house and why everyone should
own their own home, so let's look at what this simple house did
for Ty's family.
Purchased in September of 1996, for $87,500 with no money down
and the seller paying the closing cost, Ty's monthly housing
cost went down. His monthly housing cost were no longer
subjected to the landlords's whims.
By September 1997 Ty had maxed out his credit cards and
needed/wanted a jeep. A relatively high priced cash out second
lowered his total payments, paid for a jeep and put cash in the
bank.
In February of 2003, a refinance lowered his house payments,
and paid off his bills and put cash in the bank, again.
It's now November of 2005 and Ty has sold his little house.
Sale price $226,000.00. Ty and his family have profited
$140,000.00, and because they had lived in the house two out of
the last three years it's all tax free! Not bad considering
their investment (the pre-paids, 20 days interest, taxes and
insurance) was only about one third of the deposit they got back
from their last apartment.
Housing prices have gone up. Still the only hope most working
people have is to purchase and own their own home. If working
people want to get rich they'll need to buy several if not many
homes. Until we start teaching real estate to high school
students all to many people are going to get the same advice Ty
got, "you can't afford a house!" The truth is the less income
you have the more you need your own home. There are many ways to
buy a home, and almost everyone can own a home. Unfortunately
many among us will never know it!
Ty of course will need a home, he and his family are moving to
the northwest to be closer to their families. Homes in their new
area are priced so that they can pay cash and still have nearly
two years income in the bank. There's only one low spot in this
story, Eric and I'll will miss them, Ty is an exceptionally
good, dependable friend.
Copyright 2005 William J Archambault Jr
About the author:
William J Archambault, Jr has been in lending and real estate
since 1969. A mortgage broker in Las Vegas, NV He writes about
up to the minute real estate, tempered with the wisdom of our
grandfathers. He is the author of "One House At A Time / Finding
And Buying Single Family Rentals" available at
http://www.reii.org e-mail: author@reii.org
