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Scared to be a home owner?
- Thread starter FREAKYSTLYEY
- Start date
From a cost benefit standpoint the only real advantages to owning that I see are the tax deduction and the equity you build in your home. If one is smart, you don't use that equity to buy boats or sports cars. You hold onto it for emergencies and/or improving the home itself. It can also be used to help fund a kid's education. You don't have that available to you when renting.
That said, home ownership can be incredibly expensive. Ask anyone whose water heater has gone TU unexpectedly, or who's had to replace a washer or dryer, or discovered dry rot or any other of the endless things that can break/wear-out/be discovered to be a problem. It really pays to be handy as a home owner.
As a renter you deal with none of these expenses.
Personally, I didn't buy my house as an investment, I bought it because I wanted a home, and at 26 I looked at what I was making and what rents were like at the time (1998, Seattle, right before real estate prices became utterly obscene) and I decided it made sense to take the plunge. Haven't regretted it yet, and I'm still over $100k up in value on the initial purchase price.
That said, home ownership can be incredibly expensive. Ask anyone whose water heater has gone TU unexpectedly, or who's had to replace a washer or dryer, or discovered dry rot or any other of the endless things that can break/wear-out/be discovered to be a problem. It really pays to be handy as a home owner.
As a renter you deal with none of these expenses.
Personally, I didn't buy my house as an investment, I bought it because I wanted a home, and at 26 I looked at what I was making and what rents were like at the time (1998, Seattle, right before real estate prices became utterly obscene) and I decided it made sense to take the plunge. Haven't regretted it yet, and I'm still over $100k up in value on the initial purchase price.
If you can afford to put a full 20% down and make payments of at least 110% of the minimum, AND if you have at least three months of income in the bank AFTER all move in expenses, then do it. Your note won't last anywhere near 30 years. Bi-monthly payments helps too (look it up). The problem is that most people who THINK they can afford a house really can't.
Suddenly the bad water heater is yours, not the landlord's. The grass is yours to cut so you need a lawnmower or landscape company. The insurance is yours. The cable (included in many rents) is now yours. There's a lot more to it than "I have $1,500 a month so I can afford a house". That kind of thinking is what burst the housing bubble in my view.
Suddenly the bad water heater is yours, not the landlord's. The grass is yours to cut so you need a lawnmower or landscape company. The insurance is yours. The cable (included in many rents) is now yours. There's a lot more to it than "I have $1,500 a month so I can afford a house". That kind of thinking is what burst the housing bubble in my view.
spot on- This is the reason I don't own. That $1500 is more realistically $2300-$2500/mo, not including saving for emergencies.
The 20% is 70K on a 350K home....ouch
Plus, lenders are getting stricter on giving out those loans these days, you need to be above the mid 700's to even get considered, and that won't be for the most favorable rate. over 800 will get you under 4%
You sound like renting fits you best.
Concerning home "ownership" as we've been taught to think it is.....
Pros: you can pretty much do what you want to it unless you're in a neighborhood with a Neighborhood Control Unit(aka Homeowners Assoc.).
Cons:
YOU NEVER REALLY OWN IT, THE STATE DOES, YOU PAY RENT THEY CALL TAXES TO FOOL YOU.
You have to do ALL maintenance or pay someone to do it for you.
Concerning home "ownership" as we've been taught to think it is.....
Pros: you can pretty much do what you want to it unless you're in a neighborhood with a Neighborhood Control Unit(aka Homeowners Assoc.).
Cons:
YOU NEVER REALLY OWN IT, THE STATE DOES, YOU PAY RENT THEY CALL TAXES TO FOOL YOU.
You have to do ALL maintenance or pay someone to do it for you.
DONT EVER GET BOXED INTO A HOMEOWNER'S ASSOCIATION. (Unless your heavily into masochism).
If i made any mistake in buying a home, this is #1 - hands down.
The first year we moved into our home, my wife got busted by the Neighborhood Oppression Unit Cops. We were forced to take down the Christmas decorations she spent nearly a day putting it up.
I know the feeling of being "trapped". I'm miserable where I live, but am "trapped" here because of my job and house. Ideally I'd love to move elsewhere, but feel stuck here mainly because of my job, but now owning a house here makes the idea of moving seem even that much further out of reach. I have a good job, which I won't be able to replace anywhere else, and am now stuck with a house I doubt I'd be able to offload by any means other than to short sale it. About 7 years ago, I had a lesser job and was a renter. I felt much more free back than to pick up and leave. I didn't have a dumb house weighing on me like boat anchor. I could have just moved out of my rental and been free and clear of the place. I wish I had the freedom to make the move now. But instead decided to settle down, buy a house, and focus on career. Now I'm miserable. I hope I don't sound like too much of a whiny bastard, because I know I'm much better off than a lot of people now days. Don't get me wrong, it's just I'm truely that miserable where I live. And I'm basically stuck here.
I suppose if you like where you live, want to settle down there, and have a family to take care of, than home ownership is a good idea. But for someone like me (non of the above apply to me), the only advantage I see to owning a home is the tax deduction it allows you for writing off the mortgage interest. For me, it makes the difference between having to pay at the end of the year, and getting a return of about $4,000. But there's always talk about doing away with the mortgage deduction anyway, so who knows?
If I had it to do over again, I'd stay a renter and only buy a house if I was living somewhere I knew for certain I wanted to stay for a LONG time.
I suppose if you like where you live, want to settle down there, and have a family to take care of, than home ownership is a good idea. But for someone like me (non of the above apply to me), the only advantage I see to owning a home is the tax deduction it allows you for writing off the mortgage interest. For me, it makes the difference between having to pay at the end of the year, and getting a return of about $4,000. But there's always talk about doing away with the mortgage deduction anyway, so who knows?
If I had it to do over again, I'd stay a renter and only buy a house if I was living somewhere I knew for certain I wanted to stay for a LONG time.
I fully understand wanting to hold on to your freedom.
However, I took a different approach. I bought a home but
I didn't buy the biggest, baddest house I could afford (as
many people do); I bought a modest house in a nice, quiet
neighborhood. That kept the payments and costs down so I
could pay it off faster and still enjoy taking vacations, having
a nice vehicle and hoping to retire early with low property
taxes. Also, I bought a relatively new home (4-years old) so
I knew it would have decent features (appliances, water
heater, roof, etc.)
This crappy economy killed the early retirement idea but just
about everything else worked out. I paid my house off. Now,
I have no mortgage or rent payments. Life is good.
I love being a homeowner. To me it's a source of freedom and independence. I had a house and I lost it in a divorce. I had to stop working a few years ago so doing lawn care, gardening, fixing things etc.. were a big part of what I did in my time, along with music. Now that I'm in an apartment I hate not being able to do any of those things. If somethings broken, I'm not allowed to fix it. I have to deal with the noise of other people and try to not bother people myself. I'm a drummer primarily, so I have to pay for rehearsal space to play an acoustic set and even then I have a set time that I'm allowed to be there and play. I have an e-kit, but I hate playing it.
People complain about houses costing them more money for repairs and having to do maintenance, do yard work etc.. but I'd take that over what I see as a restriction of what I love to do in life. I'll get there again eventually, and when I do I'm going to cherish all of the things that go along with owning a home. The good and the bad.
People complain about houses costing them more money for repairs and having to do maintenance, do yard work etc.. but I'd take that over what I see as a restriction of what I love to do in life. I'll get there again eventually, and when I do I'm going to cherish all of the things that go along with owning a home. The good and the bad.
