$1,450 mortgage payment (which included homeowners’ association fees and taxes — typical with a condo purchase), Jiggetts began saving the difference for several months before she closed.
“I actually received that suggestion from BE,” she says, “And I realized I could do it and still maintain a decent lifestyle.”
The 700-square-foot condominium needed renovations, so the seller gave Jiggetts a $3,500 credit toward the purchase price, $205,000. Using the $3,500 credit and $7,000 that would have gone toward a down payment, Jiggetts did extensive remodeling that included completely gutting the bathroom, refinishing the kitchen cabinets, replacing kitchen countertops, retiling the kitchen floor, installing new carpet, and adding recessed lighting. She moved into her new home in September 2005.
Since buying her home, Jiggetts has earned a promotion to customer development account manager that increased her salary almost 50%, making it easier for her to pay her mortgage. But she has remained a careful money manager. She switched to a less expensive cell phone plan, eliminated long distance service on her home phone, and minimized shopping for unnecessary items.
Looking back, Jiggetts says she might have done things differently — she wasn’t satisfied with her real estate agent’s level of expertise and feels that she paid too much for her home. But the experience produced positive results in the end, she says. This year, Jiggetts saved 15% on her 2005 income tax returns because of homeownership credits. And she remains mindful of maintaining a good credit history, which lowers her rates for credit cards and car insurance.
“Everybody should buy a home,” she says. Although she didn’t win our contest, Jiggetts is “grateful to BE for teaching me that owning my own home was possible.”
Jiggetts was one of more than 950 contestants who filled out applications in an effort to win the $10,000 down payment. She didn’t win the cash prize; BE’s editors selected James and Kimberly Papillion of Baton Rouge, Louisiana, as the winners (see “A House Is Now Our Home,” March 2006). However, Jiggetts won nonetheless because she’s built an asset through homeownership.
A FOUNDATION FOR WEALTH BUILDING
Across racial lines, homeownership is the greatest contributor to generating wealth in the United States. That’s why BE launched its Own Your First Home Contest last year. It’s also why “to use homeownership to build wealth” remains the No. 1 Principle of our Declaration of Financial Empowerment, the centerpiece of the BE Black Wealth Initiative (www.black enterprise.com/wealth/wbk.asp). The benefits of homeownership are many, and they extend beyond personal asset building. Homeowners tend to play more active roles in their communities, they vote at higher rates, and they contribute to neighborhood stability at higher rates than non-homeowners, according to public policy studies.
“Homeownership is transformative because people use their equity to pay for education for themselves or their children,” says Ken Wade, chief executive officer of NeighborWorks America, a Washington, D.C.-based nonprofit organization that provides financial and training assistance to improve communities. “A good number of small businessmen get their start by tapping into the equity in their homes,” he adds.