There's no question that in certain cities in our country right now, given the current climate of the politicians and some of the public's perception of police in general, are negative.
And so these folks are looking elsewhere for employment.
I think, I do think that there are situations where somebody should rent and there are situations where somebody should own.
And I don't know that moving around is good for ownership because you don't necessarily have enough time to establish any sort of equity.
If you have the ability to, if you have saved money from your previous employer and you want to go to say Florida or you want to go to Nashville or wherever the hot spots are right now in the country, and you can make a better living by doing that and you want to take a shot at buying a home, yes, then that works for you.
But I think you really need a five year time frame for wanting to own a home.
I think in five years, a lot of things happen there.
I think after like the first 12 months, you're seeing virtually no principal be paid off your mortgage, presuming that you do a 30 year loan.
So if you're going to do something and you're not going to be there for more than say two years, you're probably going to be either breaking even on that situation or even paying in that situation or getting on the home's appreciation.
And I think the first thing is, you know, the career starts first.
I think the career is the, you know, we see police, probationary police officers here in Chicago.
We see them at the Academy, like the second day that they're on the job and they're still in their plain clothes.
And we talk, our credit union, our parent company comes in and we talk about financial planning and why you should contribute to your deferred compensation right away.
The importance of savings, the importance of financial responsibility.
So part of it is also education.
And that's why I think we do well is because we talk to so many recruits.
And again, we're, you know, if you capture 20 or 30% of that market, you're doing very well for yourself as a business.
We'd like to capture 100% of it of the people that are raising their hand and saying, yeah, I'm interested in buying a home.
You know, and the most common question we get is, are there any down payment assistance programs?
And if you're going to move into an area that is heavily, you know, there's a couple of programs that are available to the public, particularly with first responders, then that's another avenue that you can look for some assistance.
Now, as a fiduciary, the one thing I will tell you about down payment assistance is that down payment assistance is a means to an end.
There are always stipulations with that down payment assistance.
There might be a stipulation that you have to live in the home for five years.
Otherwise, if you sell a house and you leave, you're going to have to repay the down payment assistance.
There's, there's, and those down payment assistance programs are only, they're limited by the availability of funds.
A mistake that a lot of folks make is to think that the lender, okay, us, are responsible for providing that down payment assistance program.
That's not the case. And we used to have a down payment assistance program here in Chicago that was excellent.
And we did a bunch of loans through it. And then the funding just went away. And so therefore the program went away.
So in some cities, and I'm just stating the facts, like in Chicago, which is steamrolling to a crisis in the debt and expenses and the cost of living and everything, there's, there's no room. There's virtually no room for any type of home incentive for down payment assistance.
So it just isn't. And now if you're going to a city that is a progressing city in terms of its some, the growth of the city and there's good economic opportunities, there's generally going to be probably some good opportunities with down payment assistance there.
But I will say the one caveat about down payment assistance is, again, as a fiduciary, we believe as an organization that you should have some skin in the game of your own.
And I'm not saying that those programs don't help because they do. And there are many valid circumstances that makes total sense to do it.
But the one area that we worry about is if it's too easy and you just get that down payment assistance and then you have nothing into the deal into that transaction, is that necessarily financial responsibility? And the public's going to be very angry with me by saying that because I'm taking away possibly, you know, some treats from people.
But really, you know, the minimum that you probably need to have into any transaction is 3% down. And I think that's why with the Fannie Mae and Freddie Mac, which they really control the majority of the lending in our country, Ginny May, Fannie Mae, Freddie Mac, the 3% down threshold is very important for a reason. And that is because a person's equity into the transaction represents their effort, their work, their dedication. You know, equity means we call it sweat equity sometimes. It's you working and you building towards a goal.
And I think those are the situations that there is no test to be a homeowner. There is no license to be a homeowner.
But we always try to be educational in our home buying seminars because we want people to understand what the objective is.
And the objective is to, you know, sustain yourself and to have a positive future, to build financial wealth.
We, I do not believe that equity in a home should be confused with savings. But equity in a home is very important because if you don't have enough equity in your home and you try to sell your house, it's going to cost you money. So it's one of those things where, you know, again, veterans, VA loan aside, that's an exceptional circumstance there. There's a dedication to the military and they're helping people out who have given themselves.
In some cases have, you know, practically killed themselves, right? Had injuries, PTSD, that's a different situation.
But for your general population, somebody walking in and wanting to buy a home, if they're asking you the very first question is, do you have any down payment assistance? The answer is, I don't provide it. The area or the municipality that you're in is going to be the one who provides it.
And even though I'm going to tell you that, I'm still going to want to know if you've saved any money, if you, you know, where have you come, where are you at in that path?
And that may seem antiquated and maybe a little bit overly old school. And I'm not a boomer, but definitely somebody who could confuse me for one and say, oh, that's a boomer answer because, you know, you all had the savings. And it's like, well, it's all relative because at some point, I was broke.
And at some point, I had to make a decision to save money. And how did I do it? Well, I lived at home for a year.
And then the other way is you get a roommate and you live kind of like an animal for another year where you're eating ramen noodles and, you know, you're eating crockpot meals forever and you haven't seen a green vegetable in a while. And it's what a 20-something year old can handle at that point.
So it's relative. You know, being broke is being broke. It doesn't matter what time in our history that because, you know, the future is promised to know on, I can't read the future.
And in 30 years from now, there's going to be people saying, and I don't know what the next generation that far out would be called, they're going to look back at Gen Z and say, holy cow, you had it really easy.
So the nature of things is that it's all relative. And one thing that I think should stay constant is that a person has a financial commitment to bettering themselves.
Part of that is owning a home, possibly. And if you choose to own a home, you have to take the necessary steps to do that, which requires some discipline.
Police Mortgage specializes in conventional mortgages, purchase money transactions, FHA loans, and VA loans. Led by founder and CEO John Aretos, Police Mortgage is known and respected for providing clients with exceptional service, customized terms, quick and easy closings, and low money down options. To learn more about Police Mortgage, call 312-499-8878 or Connect with a Mortgage Expert.
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