I used to work for a title company, watching excited first time home buyers sign their loan paperwork. Because it was 2009, I also read heart wrenching letters from homeowners unable to make their payments, pleading their case before the bank for a short sale, their only shot at avoiding foreclosure.
As a young, broke newlywed, I observed the headache and heartbreak premature homeownership caused so many when the bubble burst. I never caught house fever because I saw homeownership as a weighty responsibility with far reaching implications.
Even though we could qualify for a loan now, we continue to rent. I think back to those hopeful young couples who sat in a banker’s office in 2005, borrowing as much as they could qualify for, unable to foresee the sleepless nights and money fights these payments would cause.
That’s the thing about debt: the instant gratification of getting something we don’t have the cash for outshines the reality that we’ve given some of our freedom in exchange.
(Not everyone who has a mortgage has stress like that, of course. I just happened to be exposed to a lot of people who did.)
Everyone has an opinion about when is the right time to buy. Since mine counters much conventional wisdom, I thought I’d share some of what’s behind it:
A good choice at the wrong time is a bad choice
Some say you should buy even if you can’t put anything down because renting is “throwing money away.”
I understand the sentiment, and I know that owning a home is a great long term investment. But timing is everything, and investing in a good thing at the wrong time can be a huge mistake.
In our case, if we are patient, we can save up a bigger down payment. Then our monthly payment will be lower, and we can pay it off more quickly, saving thousands of dollars in interest.
If renting is throwing money away, what about paying tens of thousands more than necessary in interest?
Not everyone agrees, but we don’t think it’s wise to take out the biggest loan of our lives when we’re already in debt.
We know how much debt limits our options because we’re in the thick of it. The last thing we need is even more of our income committed to monthly debt payments, not to mention more expenses like taxes, repairs and maintenance.
An exercise in contentment
I may not have had house fever, but I did dream of upgrading to a house, even as a renter, when we moved.
The on campus apartment we moved into instead was several steps down from the condo we’d lived in during graduate school. But the price is right, and while we’re paying off debt and eventually saving to buy a house, price is most important.
I used to be anxious to move, embarrassed to invite people into our concrete building, but those feelings have faded.
I realize now that owning a house isn’t a key to happiness. We are content here, our needs are met, and I can’t imagine a yard and a garage increasing our happiness substantially.
This lesson in contentment has bled into other areas of my life. Learning to focus on things with lasting value has set me free from the bondage of feverish acquisition, and it started with this apartment.
The Nester has written for years about the ways she’s made her family’s many rentals into home. I highly recommend her site. She is wise and encouraging, and offers great practical, inexpensive ideas.
The wrong motivation
Most of the arguments I hear for buying a house now revolve around the idea that you’re missing out if you don’t. Interest rates are low! Home prices are going up! All your peers are buying homes!
These things are all true, but irrelevant if the timing isn’t right for us. I also don’t want to make a decision- especially one that will affect my life for decades- out of fear. Fear of missing out is still fear.
What about you? Are you renting? What do you think about renting vs. buying?