Interview Questions for Tom Graneau
Question: On your book cover, you make a startling statement: “Renters Win, Home Owners Lose: Revealing the Biggest Scam in America.” Why is that so important for readers to understand?
Answer: Close to 90% of Americans are broke, and home ownership is the biggest contributing factor! We’ve been trained to accept the idea that “Home Ownership” is the safest path to “financial prosperity.” In reality buying a home is the worse type of financial investment a person can possibly make.
Question: We have come to accept the idea that buying a home is one of the best financial investment one can make. You say it’s not. What is the main disadvantage that you see with home ownership?
Answer: The cost of owning a home. The mortgage is a deceptive idea that make lenders rich and keep home owners poor. In addition to the mortgage, there are hidden costs such as property tax, home owners insurance, remolding, home owner’s association fees, and maintenance costs that keep sapping the owners wealth.
Question: The book compares the outcome of home owners vs. renters and shows that renters can potentially be better off financially. That is certainly not what we’ve been made to believe. Could you elaborate on this point?
Answer: Renters are potentially in a better position than home owners to become financially independent, even if they don’t think so. This analysis is based purely on the amount of money that goes out from each group every month. Renters who feel that they pay a lot in rent for housing and believe that their financial responsibility would be less if they move into a home don’t have all the facts.
Question: What is "RENTERS’ POWER"?
Answer: Most people who rent habitually feel inadequate as a result of their housing choice. Privately, they feel unaccomplished, unsuccessful, worthless, and poor just because the can’t buy a house. Most of this feeling is cause by the real estate industry’s successful marketing tactics.
However, their position as renters provides them tremendous freedom of movement, flexibility, and financial control. From this standpoint, renters have a lot of power. Unfortunately, most people take these things for granted until the move into a home and feel trapped.
Questions: Many people have come to depend on their “home equity” for financial security. What are some of the dangers associated with relying on home equity?
Answer: the “Home Equity” idea is the biggest misconception in the whole program!
(As you know, “Home equity” is the appreciated value of the property. For the most part, this number is based on the balanced owed on the mortgage and the market value.) There are several problems associated with the concept:
- I call it , Phantom Wealth… it’s here today but could be gone tomorrow due to real estate market fluctuation.
- Most people are excited when they sell a home and get some cash in their pockets. But pocketing some money after the sale of a home, doesn’t mean that you made money.
- Buying and running a home is a business operation. That means, all costs associated with running a business must be considered before you can claim a profit.
- In most cases, when people sell the properties and make some money, the lender has made almost 3-times as much on the mortgage.
- Banks and mortgage companies are in business to make money…not to see homes owners get rich.
Question: The tax benefit is one of the major incentives for buying a home. What is the problem with relying on mortgage interest deduction?
Answer: Psychologically, most people believe that mortgage interest deduction is cash. At the end of the year, I believe that most home owners get disappointed because they get nothing more than what renters would receive—the average tax refund.
Question: What are some of the HIDDEN dangers associated with mortgage refinancing.
Answer: Mortgage refinancing is another deceptive ploy built into the housing market to make mortgage companies rich. Each time, a home is refinanced, the home owner restarts the clock on the loan, meaning back to zero. Moreover, there’s always a costs (now or in the future) associated with the change. Hence, more money out of the owner’s pocket.
Question: You started life as an immigrant to the U.S. from the Caribbean. What specific insights do you have about American economic realities as a result of your past?
Answer: I went from a simple life to a complicated one, thinking that success is achieved through credit cards, buying houses, changing cars every three or four years. Now, I look forward to being simple again. |