Wright, who works for a company that does embroidery work on uniforms or jackets, says she makes less than $30,000 a year and has two teenage kids. But after going through the NACA homebuyer program, she recently bought a house for $82,000.
Paying Yourself To Live In Your House
Instead of making a down payment, she used about $5,000 to buy points and bring her interest rate down near zero percent. That makes the monthly payments lower, that allowed her to do this 15-year loan instead of a traditional 30-year loan at a higher interest rate.
With a near zero percent interest rate, nearly all of her monthly $650 payment will go to pay off her principal, quickly building an ownership stake in her house.
"The money is going literally directly from your left pocket to your right because you're in effect writing a check to yourself," Pinto says.
Pinto acknowledges there's still a lot of work to do to figure out how to make these Wealth Building loans available more widely, and even then, it may take some convincing for homeowners.
Even though these loans are a very good deal in the long run, you pay a little more each month than you would on a 30-year loan, so many people might not be able to look past the higher monthly payment.
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