Is owning a home all it's cracked up to be?

There’s zero chance we would’ve bought when we were still journalists, even though we probably could’ve afforded it.

It would’ve been like building a house on quicksand.

 

I appreciate all the responses. For clarification: I'm one semester into a two-year Masters program, so barring something disastrous I'm not buying or moving any time soon. I'm also 37, live in a staggeringly expensive city, and have a robust 675 credit score with $30,000 in student loan debt, so much saving is in order before any thought of a housing purchase.

I worry about that. Wanderlust runs deep in my family, and as it skipped over my parents it's apparently hitting me doubly hard. I'm not averse to sticking and staying somewhere for the long(er) term if the right opportunity or person comes along, but thus far the latter hasn't and the former have succumbed to the whims of newspaper owners.

Given what I mentioned in the OP, I'm not sure retirement is even feasible. At this point I expect to work until I die. Drawing up an end game is difficult as I'm still struggling to figure out what I'm going to do when being a student is no longer an option -- newspapers are out, the landscape in academia/teaching isn't much better, and everything else is the great unknown for someone looking at a career change at 40. I'll go just about anywhere (as my record shows), but at this point that feels like as much of a hindrance as a help.

Most places I would really like to be are either light years out of my price range or have closed their doors to buyers like me for the time being. I'm not averse to commuting from the outskirts of such places; while I lived in Tokyo my commute was never shorter than 60 minutes on the train, and as long as 90. Then again, how many places have mass-transit systems of that caliber?

No spouse or kids, and the odds of my ever having either are quite low. It's freeing, in a sense -- I can pack up my life in a suitcase, backpack, and laptop bag and get to a new opportunity in the time it takes to secure an affordable plane ticket. It's also somewhat disheartening, though, as everything feels ephemeral and just marking time before the next big schlep. My younger brother and sister each bought their first house in the past year, so I'm the only one in my immediate family who doesn't own a home. While I don't necessarily hold up home-ownership as some sort of milestone of achievement or respectability, it does feel like another aspect of 'adulthood' which I've passed up in favor of living like a leaf on the wind.

 

If I was waiting for Mr. Right to come along to buy my own house, hell might freeze over first. Since getting over into marketing, I do have a good source of income, saved up for two years for a down payment and moved before the market here in DFW went completely nuts, instead of mostly nuts.

 

I bought my house 14 years ago, paid ahead on my principal and now have just 10 years left on my note. My house has gone from $150K valuation to about $400K in that time. I don’t plan to retire for another 20 years. My challenge is picking the right time to sell.

 

I know for a fact this girl isn't making a ton of money from being an influencer.

 

I like the idea of having a place you can completely call your own and don't have to worry about the vagaries of landlords.

However, I'm not much on accumulating stuff, so I think a tiny house would appeal to me.

 

No matter what size of house you get, you'll fill the space. Could be a one-bedroom shack or a 15-room McMansion, it doesn't matter. People fill the space they have.

We moved from a ranch with a full basement to a ranch on a slab. We took four loads to the dump, four loads to the auction house, four loads to Goodwill — and we still have too much shit.

 

I bought a foreclosure a decade ago at the bottom of the market. Additionally, a government program at the time offered a 10 percent tax refund on the purchase price for first-time home buyers. I bought for $70,000 and they sent me a $7,000 shortly thereafter.

I recently sold it and since I was moving in with my S.O., I was able to pocket the profit (I sold for almost $40,000 over purchase price and with decent equity).

However, my circumstances were somewhat unique on both ends. Having gone through the entire process -- and considering the current climate -- I would offer this advice:

1-Don't do it unless you can afford the full 20 percent down payment. I took out an FHA loan because I couldn't afford the full down payment. That meant I had to pay PMI for the first few years I owned the home. (I eventually refinanced for a lower interest rate and went from a 30-year fixed to a 15.) It sorta worked out for me in the long run, because I rented rooms to friends for several years. But there are much smarter things to do with that PMI money each month.

2-Go for the 15-year fixed over the 30-year option. Yes, you pay more per month. But it's the fastest way to build equity, and you also pay less in the long run, especially if you plan on keeping the house (even as a rental property). The 15-year option may not seem like a savings over renting, but you have to remember you're essentially paying a chunk of that money to yourself in equity.

3-Home ownership can be financially beneficial if you're financially secure in general. If you have other debts, you don't need a home tying up your cash. Don't buy a home simply because you feel you're supposed to. If I were buying for the first time in the current market, I would clear out every last debt first and having strong retirement contributions each month before committing to a house. As others have said, this is a seller's market, so if you hit pause for a year or two and stockpiled cash for a down payment, that might be the wiser move in the long run.

4-For the people who mentioned not having credit -- which I assumed meant little to no credit history, not bad credit -- there are companies who will do what's called manual underwriting. You'll just have to search for them a bit and they may not be local.

 

My solution to this problem was to live in a really undesirable place.

When the realtor told me I could get a pretty nice 2,000-square foot home for about $50,000, I started laughing at her. Then I realized she was serious.

Rural Indiana. Where even a journalist can feel middle class.

 

Hadn't ever heard of manual underwriting, so thanks for that. I am very much on the 'little to no credit history' side -- you can count the entries on my credit report and still have several fingers left over. Turns out credit agencies don't really care about you once you go overseas (which I find odd as Uncle Sugar wants you to report what you make no matter where you go in the world... but I digress).

 

I had a good experience with Churchill Mortgage, based I believe in Nashville. I did not use manual underwriting but I know they offer that.

Thank you for your service BTW. Are there any loan programs to help veterans get conventional loans? (I have heard bad things about VA loans.)

 

I would echo the thought that you shouldn't buy just because you think you should, rather than doing it because you really want to, and are trying to think of investing in and for the future.

That said, I would argue that it is almost always a good thing to invest in a home, or at least a house, if you can do it at all. What you should do, and should want to do, is to look ahead, and especially, think about the ugliest reality of renting: If you are renting long-term, you are, basically, paying off someone else's mortgage -- rather than your own, when the fact is that you need to live someplace anyway, and so, why do that? After a while, that thought should, and usually does, rankle.

My suggestion, especially if you are single or if it's just you and a spouse/significant other, is to own something, even if it is just a small, humble space. People always are going to need places to live. So, you can either live in it yourself, or rent it out. Either way, you, or someone else, will have a place to live, and yet, also either way, you will be the one to benefit, especially in the long term -- and especially if you never make a lot of money.

This is what I did. I've always been pretty good with my money. So, even though I've never made a lot, I now own a home -- albeit just an 810-square-foot 2bd/1ba condo. It's in an expensive area (hence the small size), but it's also in the area where most of my family lives, so, location-wise, it's good, and size-wise, it's good enough, for me. When I bought the place for $103,500, I was in my mid-20s, and started with a 30-year fixed loan (I'll echo Human_Paraquat in advising that you should always go with a fixed-rate loan, rather than an adjustable one) that I eventually refinanced up to a higher monthly payment but down to a 15-year, fixed-rate loan. When I lost my last full-time newspaper job and went through a horrible three-year stretch of unemployment and underemployment before starting at Walmart, I nearly was forced to sell my home after living in it for 17 years. That time still ranks as probably the most difficult period of my life. But, with help from family members with whom I lived and to whom I paid a lesser but still contributing rent for a couple of ensuing years while renting out the place, I was able to hang on to it, and I feel blessed to have managed that.

After paying off the loan almost four years early, I now own my home, free and clear. And the best thing is, even if I never work anyplace better or more highly paid than in a Walmart subordinate job, I will always have a place to live -- my own place to live, and now, I am able to sock away money, to boot -- instead of continually paying the same oftentimes-high rent...forever.

Think about that.

Or, if I needed some money, or decided I wanted to move someplace else, well, I could handle that, too. Because my little condo, nowadays, would sell for over $300,000.