A Different Approach to Developing Wealth

Mynd recently released their 2022 Consumer Insights Report that demonstrates how millennials and Gen Z’s have taken a different approach to developing wealth than previous generations.
For example, while 9% of Baby Boomers are contemplating the idea of investing in rental properties over 43% of Millennials and Gen Zs are choosing to remain in their current living environments and invest in rental properties elsewhere to build their wealth.
BUT IS IT WORKING?
This strategy is becoming increasingly popular. It allows the investor to remain living without disruption to their lifestyle in a place they may not be able to afford to purchase a home of their own. Instead of uprooting their lives and relocating elsewhere to attain the dream of homeownership the investor achieves homeownership by purchasing a home in a more affordable location with the intention of renting it out.
With no disruption to their life, they become a homeowner and investors at the same time. Their purchase not only creates monthly passive income for their pocketbooks but also builds equity over time – ultimately increasing their overall net worth.
They can later choose to continue to rent out the home, sell for an increased price, or move into the home if or when they want or need to.
READY TO EXPLORE THIS APPROACH?
If you would like to explore this idea further connect with us so we can help you build your wealth through real estate.
The Benefits of Putting 20% Down on a House

If you read our, “How Long Does it Take to Save For a Down Payment?” article back in October, you know you don’t need a 20% downpayment to purchase a home because there are many alternative options available to you. However, while there are a plethora of options that you might qualify for, let’s look deeper into how putting 20% down could benefit you overall. You can find tried and true suggestions for saving up your downpayment here if you don’t have 20% saved up already. Keep in mind you can connect with us at any time to get personalized suggestions for what would work best for you in your unique situation.
In this article we are going to discuss how putting 20% down can help you get a lower interest rate, pay less overall, stand out in this competitive market, and avoid paying for PMI. Let’s get started.
Lower your interest rate:
A 20% down payment vs. a 3-5% down payment demonstrates to your lender that you are financially stable and not a large credit risk. The more confident your lender is in your credit score and your ability to pay your loan, the lower the mortgage interest rate will likely be.
Pay less overall:
The larger your down payment, the smaller your loan amount will be for your mortgage. If you are able to pay 20% of the cost of your new home at the start of the transaction, you will only pay interest on the remaining 80% of the cost of the home. If you put down 3.5 %, the additional 16.5% will be added to your loan and will accrue interest over time. This will end up costing you significantly more over the lifetime of your home loan.
Stand out in this competitive market:
In a market where many buyers are competing for the same home, sellers often like to see offers come in with 20% or larger down payments. Many buyers were hoping for the typical winter “slow-down” where they could see a less competitive market but that has proven not to be the case this year. Read more in our article, “Thinking the Housing Market is Going to Slow down this Winter? Think Again!” The seller in this current scenario gains the same confidence as the lender. You are seen as a stronger buyer with financing that is more likely to be approved. Therefore, there is a significantly higher chance that the deal will go through with a 20% downpayment.
Avoid paying for PMI:
You might be asking yourself, what is PMI? Freddie Mac explains,
“For homeowners who put less than 20% down, Private Mortgage Insurance or PMI is an added insurance policy for homeowners that protects the lender if you are unable to pay your mortgage.
It is not the same thing as homeowner’s insurance. It’s a monthly fee, rolled into your mortgage payment, that’s required if you make a down payment less than 20%. . . . Once you’ve built equity of 20% in your home, you can cancel your PMI and remove that expense from your monthly payment.”
As mentioned earlier, if you put down less than 20% when buying a home, your lender will see your loan as having more risk than those who do put 20% down. PMI helps lenders recover their investment in you in the case that you are unable to pay your loan. However, this insurance is not required if you are able to put down 20% or more. In turn, this saves you from paying those extra fees.
Oftentimes, sellers looking to move to a larger or more expensive home are able to take the equity they earn from the sale of their house to put 20% down on their next home. The equity homeowners have today, creates an advantageous opportunity to put those savings toward a larger down payment on a new home.
If you are considering buying or selling or just want to talk about this in more detail, connect with us. We are here to help.
How Long Does it Take to Save For a Down Payment?

Saving enough money for a down payment on your first home can be one of the biggest obstacles to homeownership. Depending on your circumstance you might need anywhere from 3% – 20%. Speaking with a reputable local lender will help you find out exactly what your percentage will be.
But how long should it take, you ask!?
Follow along as we estimate the amount of time it takes a person earning a median income and paying a median rent to save up for a down payment on a median-priced home.
To accomplish this task we use the concept that homeowners should pay no more than 28% of their total monthly income on housing expenses. We use this information in combination with data from the U.S. Department of Housing, Urban Development (HUD), and Apartment List to determine our estimation.
According to the data pulled, the national average for the time it would take to save for a 10% down payment is roughly two and a half years (2.53). Looking at the diagram below you can also see that those living in Iowa can save for a down payment in as little as 1.31 years while those in California could take 17.56 years. The map below can help you determine the amount of time (in years) it can take for you to save in your state:
What if you only need to have a 3% down payment?
It is a common misconception that you need to have a 20% down payment to buy a home.
The reality is there are reasonable alternative options out there. First-time home buyers have an advantage with a plethora of down payment assistance programs available to them. You just have to find the right lender and ask. Need help finding a lender? Ask us to connect you with one here.
What if you qualify to take advantage of one of the 3% down payment programs?
If you qualify for a 3% down payment program, then you only have to come up with 3% of the total cost of the home at closing instead of ten or the typical 20% we have seen required in the past. Saving for a 3% down payment might not take you very long. In fact, it could take less than a year in most states, as shown in this map here:
At the end of the day
Wherever you are in the process of saving for a down payment, you may be closer to your dream home than you think. Connect with us to explore the options available to you in our area and how they support your plans for buying a home.
5 Things Every Septic Owner Needs

A Drain Snake
Don’t kill your system with Drano! Hair clogs happen. Instead of pouring caustic Drano into your plumbing (which can actually cause damage to pipes and will kill your septic system) try this super cheap (less than $2 each) and easy drain snake that works in seconds. This tool coupled with prevention (see #2 below) will keep you from having to resort to expensive and dangerous remedies.
A Drain Cover
There are hundreds of different types of drain covers. We have tried several to reduce the guess work for you and discovered that we like this flat and wide version best. You can order it here. Honestly, regardless of which kind you purchase your septic will thank you as long as it keeps hair and other large particles from swirling down your drains to prevent it from clogging and will save your septic.
The Right Toilet Paper
Most people are too dignified to talk about things related to the potty but as a septic system owner you need to know that there is a right and a wrong kind of toilet paper if you want to keep your system in excellent condition and prevent clogging. If you put a piece of your TP in a glass of water, stir it up a bit and let it sit for a few minutes it should dissolve pretty quickly into tiny pieces no larger than a nickel. This is called the TP test. If it stays intact in larger pieces your septic system is going to have a real problem breaking it down and the chances of you clogging your toilet are MUCH higher. Check out the results from a test The Art of Doing Stuff did here.
A Pumice Stone
With hard water being the rule and not the exception on Whidbey Island there is a constant battle to keep our toilet bowls and sinks free from the dreaded hard water rings. Using harsh chemicals to try and remove them can work but at the cost of damaging the function and life of your septic system. The solution? A simple and cheap pumice stone! A wet pumice stone won’t scratch porcelain but it will easily and effectively remove hard water build up just by rubbing it back and forth across the stain. Try it and let us know what you think!
A Good Septic Inspector
Because you now own your very own mini sewage treatment machine you will need to maintain it. Finding a great septic inspector and getting on a regular inspection rotation is as easy as picking up the phone and calling or texting your Windermere Broker. At Windermere we pride ourselves on always having the inside knowledge about and great relationships with vendors our clients will need. Septic inspectors are #1 on that list! Many of them have a program you can join that puts you on a regular inspection rotation so you don’t have to think about it every year (or 3 years depending on your system). If you don’t have your very own Windermere Broker you are missing out! Visit our website to find your match today
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