grace
You know all of those stories about homeowners who are having trouble with their mortgages, partly because they have very low equity in their homes?
There, but for the grace of God, goes me.
Some time back I became aware, through news articles, that they were practically handing houses out to anyone who asked for one. Like buying a used car, all you really needed was proof of a job, or a professional degree, or a good credit score. No closing costs necessary - the seller could pay it! And as fast as the value of the houses was climbing, you could go from having a $100K home to having a $200K in no time. I know that I could have gotten a house with no problem. I mean, I was paying my rent every month… surely I could pay a mortgage - in fact, that’s what people were saying. "If you can pay rent, you can pay a mortgage." It sounded great.
It sounded too great.
What about all of that stuff I’d been reading about months’ worth of pay stubs, phone calls to employers, twenty-percent down payments, and figuring out a debt-to-income ratio? I mean, it just didn’t add up. Why would reality totally disagree with all of the conventional wisdom I was finding in home ownership articles and books? I didn’t know, but I didn’t trust it. I figured that if I went for the house, something would go wrong, and then where would I be? So despite my strong desire to buy a place, I kept renting.
And I’m so glad I did.
Lesson learned? If it sounds too good to be true, it probably is. There’s no substitute for good saving and preparation.
I truly understand ~ however, I was one of the homeowners who REFUSED to live above my means. I purchased a house because I refused to rent again. Instead, I call my house “my rental”. Clearly the mortgage is comparable to what the rents are in my area. I’ve lived ABOVE MY MEANS before ~ I know all too well about that struggle. Thanks but no thanks!! I prefer to keep it real.
Comment by Karen Simpson — April 16, 2008 @ 9:45 pm
I used to get a lot of pressure from friends to buy during the housing boom. Everyone would tell me how I’m throwing away money by renting. I felt borderline harassed. But I remember growing up in a house and the responsibility that comes with homeownership. I don’t live in the most affordable area, so I knew it wasn’t the right time for me. Now, I look at the housing market. It’s a mess and the prices haven’t bottomed out. I am SO blessed that I didn’t buy. If you have 20 percent down, you are golden. Otherwise, it’s a gamble.
Comment by The Frugalista Files — April 21, 2008 @ 5:01 am