{"id":1249,"date":"2021-06-30T05:52:58","date_gmt":"2021-06-30T05:52:58","guid":{"rendered":"https:\/\/smplmortgage.com\/?page_id=1249"},"modified":"2021-06-30T06:20:21","modified_gmt":"2021-06-30T06:20:21","slug":"smart-home-buying","status":"publish","type":"page","link":"https:\/\/smplmortgage.com\/smart-home-buying\/","title":{"rendered":"Smart Home Buying"},"content":{"rendered":"\n<p>Most people aspire to own a home and believe it is very important to their financial success, however being able to articulate why is more difficult, other than a belief. There are key concepts to understand when buying a home:<\/p>\n\n\n\n<ul type=\"a\"><li><span style=\"text-decoration: underline;\">Leverage<\/span> \u2013 the reason real estate tends to create millionaires is due to leverage, leverage is using small amounts of money to control a larger asset \u2013 leverage amplifies the return on any asset.\u00a0 With $50,000 you can buy a $800,000 home or invest in stocks and bonds for $50,000. If the $800,000 house goes up 10% you made $80,000, whereas the same 10% in stocks got you $5000.\u00a0 You need both in the end, but leverage is why real estate works \u2013 if you had to pay cash for a home \u2013 the world would look very different!<\/li><li><span style=\"text-decoration: underline;\">Equity<\/span>\u2013 is the amount of money you put into buying a home, the down payment, the principal payments, and the market appreciation are all equity.\u00a0 Equity is the difference between the value of the asset and the debt on that asset.\u00a0 Equity adds to your net worth and looks good on a balance sheet but fails in a few key areas.\u00a0 Equity is not liquid and does not earn a rate of return. Once you understand that a big portion of your net worth (wealth) is not easily accessible and does not earn you anything, you may start to approach the equity decision differently.<\/li><li><span style=\"text-decoration: underline;\">Cash flow<\/span> \u2013 your home tends to consume the largest portion of your income, somewhere between 30-50% for most families.\u00a0 Living paycheck to paycheck is not the way to build financial security.\u00a0 Looking for ways to improve your cash flow, should be a focus of much of your financial planning.\u00a0 Reducing expenses is the obvious place to start, but also understand that income tends to increase over time.\u00a0 The challenge is that our expenses and cash flow tend to follow our incomes up over time. The Holy Grail of cash flow management is to both reduce expense and increase income until you are in a position where your assets pay your expenses and working for money becomes optional!<\/li><li><span style=\"text-decoration: underline;\">Taxes<\/span>\u2013 owning real estate carries with it tax implications from property taxes, capital gains taxes, inheritance taxes as well as the tax code that helps homeowners reduce income and other Federal and State taxes.\u00a0 Since the tax code is constantly changing and being adapted to the government\u2019s priorities, it is crucial to pay attention to both the expense and potential benefits of the tax laws. Hiring professionals to help manage and mitigate tax strategies is usually very worthwhile. The more tax you pay owning real estate, the less the real estate will build financial security for you and your family.<\/li><\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Most people aspire to own a home and believe it&#8230;<\/p>\n","protected":false},"author":3,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Smart Home Buying - C2 Financial | SMPL Mortgage | Mortgage Lenders | Pasadena<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/smplmortgage.com\/smart-home-buying\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Smart Home Buying - C2 Financial | SMPL Mortgage | Mortgage Lenders | Pasadena\" \/>\n<meta property=\"og:description\" content=\"Most people aspire to own a home and believe it...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/smplmortgage.com\/smart-home-buying\/\" \/>\n<meta property=\"og:site_name\" content=\"C2 Financial | SMPL Mortgage | Mortgage Lenders | Pasadena\" \/>\n<meta property=\"article:modified_time\" content=\"2021-06-30T06:20:21+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/smplmortgage.com\/smart-home-buying\/\",\"url\":\"https:\/\/smplmortgage.com\/smart-home-buying\/\",\"name\":\"Smart Home Buying - C2 Financial | SMPL Mortgage | Mortgage Lenders | Pasadena\",\"isPartOf\":{\"@id\":\"https:\/\/smplmortgage.com\/#website\"},\"datePublished\":\"2021-06-30T05:52:58+00:00\",\"dateModified\":\"2021-06-30T06:20:21+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/smplmortgage.com\/smart-home-buying\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/smplmortgage.com\/smart-home-buying\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/smplmortgage.com\/smart-home-buying\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/smplmortgage.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Smart Home Buying\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/smplmortgage.com\/#website\",\"url\":\"https:\/\/smplmortgage.com\/\",\"name\":\"C2 Financial | SMPL Mortgage | Mortgage Lenders | Pasadena\",\"description\":\"Generational Lending Experts\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/smplmortgage.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Smart Home Buying - 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