• CMG MORTGAGE, INC. NMLS #1820

Download Case Study: Building Wealth Through Homeownership

  • January 05, 2017

Home values, like other economic measures, are cyclical.  It is widely accepted that buying a home is an investment in the future.  Even in periods of recession, homes can increase in value.  The government puts forth affordability initiatives to close the homeownership gap, emphasizing its fundamental role in providing financial security.  When construction slows and available inventory lessens, sellers of existing homes have an advantage as their homes’ value goes up. To download full case study please, click here

Download Case Study

The difference in average net worth between homeowners and renters is staggering.  As of October 2015, the Federal Reserve reported that a typical homeowner’s net worth was $195,400 while a renter’s was only $5,400, and projected the 2016 figure to be in the range of $225,000 - $230,000 for homeowners and approximately $5,000 for renters.  Homes almost always appreciate in value, even with market fluctuations.  In periods of a recession, home value may decline temporarily, but will rebound to appreciate at a slower rate. 

The creation of wealth through Homeownership depends on five factors:

  1. Home Ownership Results in Forced Savings – through saving for the initial down payment and budgeting for monthly mortgage payments.
  2. Homes Tend to Appreciate in Value Over Time – from 1975 to 2012, the compound annual growth rate in home prices exceeded inflation by 0.8%.  Based on those numbers, over a period of thirty years a homeowner will experience a real gain of about 26% in the overall house value
  3. Federal Income Tax Benefits* – homeowners may qualify for federal income tax benefits by deducting mortgage and property taxes.  Additionally, may will benefit from tax breaks when they sell their home
  4. Increased ROI with Mortgage Financing – each monthly payment builds equity. 
  5. Not Subject to Rent Inflation – rents nationwide have increased 20% over the past five years.

*Please consult a tax advisor for specific details.

 

Cindy MacDonell
Senior Loan Officer
NMLS # 316198
Branch NMLS # 1270689

Cindy MacDonell

PHONE: (707) 781-8185
cmacdonell@cmgfi.com

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© CMG Financial, All Rights Reserved. CMG Financial is a registered trade name of CMG Mortgage, Inc., NMLS ID #1820 in most, but not all states. CMG Mortgage, Inc. is an equal opportunity lender with corporate office located at 3160 Crow Canyon Road, Suite 400, San Ramon, CA 94583 888-264-4663. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act No. 4150025; AK #AK1820; AZ #0903132; Colorado regulated by the Division of Real Estate; Georgia Residential Mortgage Licensee #15438; Illinois Residential Mortgage Licensee; Kansas Licensed Mortgage Company #MC.0001160; Massachusetts Mortgage Lender License #MC1820 and Mortgage Broker License #MC1820; Mississippi Licensed Mortgage Company Licensed by the Mississippi Department of Banking and Consumer Finance; Licensed by the New Hampshire Banking Department; Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker – NYS Department of Financial Services; Ohio Mortgage Broker Act Mortgage Banker Exemption #MBMB.850204.000; Licensed by the Oregon Division of Financial Regulation #ML-3000; Rhode Island Licensed Lender #20142986LL; and Licensed by the Virginia State Corporation Commission #MC-5521. CMG Mortgage, Inc. is licensed in all 50 states and the District of Columbia. Offer of credit is subject to credit approval. For information about our company, please visit us at www.cmgfi.com. To verify our complete list of state licenses, please visit www.cmgfi.com/corporate/licensing and NMLS Consumer Access (www.nmlsconsumeraccess.org).