Article By: Jim Porter – June 6, 2023
Jack and Diane graduated from Vacaville High School in 1988. Jack played the trumpet in the band and second base on the baseball team, and Diane was a member of the dance-drill team and played soccer.
They started dating as juniors and she was one of those 4.0 GPA kids that scored high on her SATs, and he always kept a solid B average to remain eligible for baseball and the band. Diane’s goal was to become a registered nurse like her mom and grandma before her and Jack’s dream from the time he was in kindergarten was to become a firefighter, like his dad and his godfather, Uncle Joe.
After graduation, Jack went on to graduate from Solano Community College and studied fire science and the pre-requisite courses for one day becoming a paramedic, and Diane went to Sac State and nursing school and by the time the two of them were 25, she was an RN, and he was a city firefighter.
After a big wedding in June 1994, they purchased a 2,000-square-foot home in Crestview, an older, well-established neighborhood on the northwest side of Vacaville for $200,000. Jack and Diane obtained an FHA 30-year fixed-rate mortgage at 7.5% with 3.5% down and convinced the seller to cover their closing costs. They scraped together $9,000 for the cash to close and their total payment including taxes and insurance was a scary 60% higher than the rent they were paying on their apartment, but they were thrilled to own their own house.
They made their house payments on time every month and by 2001 their loan balance was down to $175,000 and the value of their home had risen to $225,000. They refinanced their mortgage down to a rate of 5.5% on a new 30-year fixed in 2001 and got rid of their PMI at 80% loan-to-value, dropping their house payment by $450 per month. A year later, mortgage rates improved again, and they refinanced to 4.00% and this time, they decided to go with a 15-year fixed rate loan because they could easily afford the PITI payment of $1,800.
They were both making around $90,000 per year in 2002 and they had a great deal going on childcare for the three little kids they had produced over the seven years since the wedding, because both his mom and her dad were retired, and both lived in Vacaville. Jack worked one 24-hour day on and two days off, and Diane had a sweet 32-hour per week schedule.
They paid off their home in 2017 at only 48 years old and in 2020, during the Pandemic REFIMANIA, did a cash out refi of $200,000 on a 15-year fixed at a 2% rate to totally remodel their home top to bottom and paid cash for a solar system. They were now making $25,000 per month and their total house payment PITI was only 7% of their monthly gross income.
By 2020, their 401k plans had grown to well over $1.2 million, their home value was $700,000, Jack was 100% vested in his CAL PERS retirement and planned to remain on the job till he was 55, and this lucky couple was sitting on over $200,000 in their bank and brokerage account in cash reserves. The two oldest kids were now in college and the youngest was doing extremely well in high school and overcoming the challenges of having down syndrome.
Is this story about luck and privilege or is it simply about hard work?
Jim Porter, NMLS No. 276412, is the branch manager of Solano Mortgage, NMLS No. 1515497, a division of American Pacific Mortgage Corporation, NMLS No. 1850, licensed in California by the Department of Financial Protection and Innovation under the CRMLA / Equal Housing Opportunity. Jim can be reached at 707-449-4777.
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