I’m taking that “oh-so-forbidden” (I kid, I kid) route to personal finance shame – I’m buying a house.
Guess what? Interest-only mortgages are making a comeback. Guess what? On houses people can’t afford. Because, in theory, you’re going to take the difference (i.e. “savings”) and hope to get a return on it higher than what you’ll be paying down the line – or maybe you’ll pay more than you owe and have your house paid off in less than twenty years. Maybe sixteen, maybe ten – who knows? The point is to not buy a house you can’t afford – but then would Interest Only loans on a house you can afford work in your favor?
Free Money Finance has five tips to get the best deal in buying and selling (from parade magazine) – buying is what I am doing (did?) and we (Wife and I) hit it pretty much on the head. We’ve got great credit ratings, our debt is almost extinguished (I promise to update my networth this week! And my NCN Network!). Overall, we’re doing incredible – on top of our finances, enough cash to cover emergencies, and we landed a great deal in a great neighborhood – a house that was on the market for 180+ days, passed inspection with flying colors.
But why housing? Why not investing?
We want a house. We, being my wife and I, want a place to call home, where our neighbors are not against our walls, their dogs aren’t scratching at our door, and they aren’t blaring their polka music at full blast at 3am. We’re wanting stability, and a place where we can have space to grow a family, a backyard to throw Barbecues in, and a place we can decorate and design the way we want it, how we want it, without the landlord complaining.
Yes, it’s an emotional thing. But you have to weigh the cost (financially) with what we will get out of it (utility). Trust me, it’s something we’ve debated, gone over, checked our selves on renting vs. buying many times (and we’re not the only one) – we came to this decision after a lot of thought. We won’t have to deal with misinterpretations of our lease, or poor maintenance (I get to be poor maintenance!).
It’s a hefty decision – but like many bloggers have pointed out, sometimes you save too much for retirement that you miss out on life. I’m not saying they aren’t right about investing or renting, I’m saying that a person who buys a house has more in mind than just making money.