In 1993, when they were just 24 years old, Rufus and Jenny Triplett took advantage of a Veterans Affairs home loan to purchase a newly constructed three-bedroom, three-bathroom house in Powder Springs, Georgia, during Atlanta’s housing boom.
Rufus, a Marine Corps serviceman, and Jenny, a veteran of the Navy, financed 100% of the home’s purchase price; even their $1,000 earnest deposit was refunded at the closing. The couple’s $760 monthly mortgage payment was lower than the $960 rent they had been paying for a cramped two-bedroom apartment in the Washington, D.C., metro area. The Marine Corps also covered the Tripletts’ relocation expenses.
Soon after the Tripletts purchased their home, its value quickly jumped more than 35%, or $30,000, from its original $84,000 price. Over the years the couple has put in a pool and basketball court and upgraded their kitchen, increasing the value of the home to $134,900, according to a current appraisal.
Purchasing their home is one of the smartest moves they ever made, the couple, both 44, now says. “We will be the first in either of our families to have a home
that is totally paid for, and one that has helped keep our business afloat during tough economic times,†says Jenny. But the couple has also been smart about using their home and managing their lender.Seven years ago, Rufus, who works full time for National Envelope, one of the country’s largest envelope manufacturers, and Jenny started a multimedia company. Previously, in 1997, they’d borrowed $5,000 against the equity in their home to start an entertainment company, which they paid back in full in five years. They used the money earned from the entertainment company to finance their current multimedia business, which is profitable. To keep costs low, the couple converted their attic into a studio.
Using their home as a place of business has provided the Tripletts several tax advantages. After consulting two accountants and their attorney, and attending seminars on home-based businesses, the Tripletts deduct 28% of their mortgage payment, depreciation, property taxes, insurance, utilities, and expenses for household maintenance, repairs, or improvements. (For more information about home office deductions, see www.irs.gov/uac/Work-From-Home%3F-Consider-the-Home-Office-Deduction.)
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The couple also fought their bank–and won. After Bank
of America acquired their loan from the defunct Countrywide Home Loans, the couple noticed inexplicable “miscellaneous†fees on their mortgage statements. In fact, the Tripletts were being charged default service fees. These fees are assessed to cover a bank’s cost of hiring real estate brokers to evaluate homes for foreclosure. Banks are only supposed to assess these fees when a homeowner is behind on payments. But the Tripletts say they had never paid late.In addition, the couple saw ads on TV about refinancing programs that President Obama had initiated to help homeowners–all homeowners, not just those who couldn’t pay their mortgage. Told by their lender that they were ineligible because they weren’t behind in their payments, the Tripletts boldly stopped paying their mortgage in November 2010. Rufus says, however, “I saved [the mortgage payment in an account] every month, just in case.†Although the move bruised their credit score of nearly 700, lowering it by about 100 points, the almost $900 accumulating in fees was their overriding concern. Their score has since recovered.
Next, the Tripletts filed a complaint through Helpwithmybank.gov, a website of the
Office of the Comptroller of the Currency, a bureau of the U.S. Department of the Treasury which regulates and supervises 2,000 national banks and federal savings associations. Jenny says the agency essentially forced the lender to review their case. Within five months the bank refinanced the loan, bringing down their payment to $450 from the $646 they had been paying (their payment was previously lowered when Countrywide sold their loan). By this time the couple had saved nearly $6,000 in mortgage payments. They used some of it to pay off nearly $3,000 in revolving debt.Since then, they have focused on maintaining their debt-free lifestyle. With the exception of what they owe on their home, the Tripletts have attained financial freedom. Looking back at the journey and the benefits of homeownership, Rufus, says, “I think we got exactly what we were aiming for.â€
How We Did It
Consider using your home to operate a business. We started our business in a spare bedroom not knowing if it was going to succeed or fail. If space is available in your home, use it for a home business.
See if you need to expand and how much an expansion would cost. Working from home saves you money on expensive overhead and allows you to write off for tax purposes a percentage of your home space, utilities, and income.Take advantage of homeownership programs. We knocked $200 off our mortgage through persistent research and by contacting a federal agency via Helpwithmybank.gov. Although the bank told us we were ineligible, we persisted and got our loan refinanced. Discount programs such as homestead exemptions are available to homeowners, as are programs that specifically target minorities. Organizations such as NACA, or the Neighborhood Assistance Corporation of America, assist troubled homeowners.
Read your statements. Don’t just get a bill and pay it. Take time to look through it, and don’t be afraid to question anything out of the ordinary. If you have miscellaneous charges or corporate fees on your statement, send a registered certified letter to your lender asking for an explanation. We were charged excessive and unnecessary service fees. It was just plain fraudulent. Being proactive and persistent saved us a lot of money in the long run.