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THIS is what home ownership is all about
Someone in my office was working on a file last week and called out these borrower stats. I’ve been mulling them over in my head ever since:
- 65 year old borrower owns 6 properties: 1 primary residence and 5 investment properties, two of which are vacation rentals so he can use them for his own leisure time as well.
- Owns 3 of the 6 properties free and clear, including primary residence where he’s lived 35 years
- Total debt-to-income ratio is a very low 14%. That includes 2-year average net income from job as independent contractor and also net positive income from investment properties (more on debt-to-income ratios here).
- Refinancing all 3 financed properties to optimize rates.
- His primary residence is worth $125,000.
- Total value of all properties $2,255,000.
- Total debt $718,000, and he’s paying it down $100,000 as part of this refi process so he’ll have 73% equity in his properties and $250,000 in cash.
So what can we take from all of this: Yes his job enables him to improve properties for less cost than many. But it’s not a high income job. It’s not the job led to this exemplary home ownership profile. Just a long term view. No greed. No burning desire to live in a trophy home. Blending the need for a place to live with desired lifestyle (vacation homes) and investment strategy.
This is a model citizen, and this is what home ownership should be all about.
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