We’ve owned our home for two years now, and as we prepare for our epic adventure by trying to sell it, we’ve found ourselves reflecting on whether or not the decision to buy a house was a good one.
All things considered, I wouldn’t go back and change buying our home, but we know that we didn’t make the wisest decisions when we purchased it. We’re treating it as a learning experience with lessons we can apply when (or if) we decide to buy again. In the meantime, we hope others can learn from our experience.
Despite what your lender says, you probably can’t really afford to buy a house.
Your lender looks at credit scores, income, and current debt. And that’s really about it. Sure, that sounds pretty thorough, but it doesn’t take real life metrics into account. When they approve you for a mortgage amount, that’s the base payment only and doesn’t include your other added monthly expenses like taxes, insurance, maintenance, and (usually) larger utility bills. If they approve you for a payment of 25% of your income, you’re easily looking at 50% by the time that all adds up. It’s easy to get wrapped up in their numbers and not look at your actual individual situation. Based on their numbers, we thought we were going from $900/month in rent to a $1300/month mortgage, but with taxes and insurance, we nearly doubled our monthly payment, and that’s not even counting utilities and maintenance. Take your time and do the REAL math!
You have no savings to buy a house.
This is something from the dregs of the housing market bounce-back. There are quite a few loan options right now that don’t require a downpayment, and it’s enticing people to buy houses that maybe aren’t financially stable enough. This was a huge draw of the VA loan that we used. Even if you choose a no-down-payment option, I strongly encourage having a good chunk of savings and buying at the lower end of your budget (YOUR budget, not what your lender says you can afford!). Having no downpayment means it’s going to take a lot longer to build equity. In fact, two years in, we still have virtually none and that means we don’t have a lot of leverage in selling our house. By buying at the lower end of your budget, you can make additional payments to your principal each month and build the equity. If you buy at the higher end, your cash flow is likely too restricted to pay that extra.
Also on the savings note, job loss and emergencies do happen. Really think about how you’ll keep paying that mortgage if someone is too ill to work for an extended amount of time, or layoffs come knocking. This is especially true if you are a single income family or your income is hard to replace quickly. Sure, you’re probably thinking “we’ll just sell the house,” but it’s really not that easy. Houses don’t sell overnight and if you’re already strapped for cash, coming up with enough for moving expenses and a deposit won’t be a walk in the park.
You might need to wait for a different season of life to buy a house.
While we’re on the topic of houses not selling quickly, this is something to really be mindful about. If your dream job from across the country comes knocking, you’ll want to pursue that without the added burden of selling your house to make it work. Same goes for expanding your family. We were done growing our family when we bought, but if you plan on adding more babies, especially by adopting or fostering, you may want to wait until you know what space you’ll really need for the long-term. When we first thought we wanted to buy a house, we only had one kid and our needs were very different from having five now!
You’re too busy to buy a house.
Perhaps one of the biggest surprises for us was the time commitment of homeownership. That’s partly due to doubling our overall square footage and the added time spent cleaning, but some of it just happens no matter what. Along with added cleaning, there’s more maintenance, more yard work, and more worries when you’re away. Sure, you can hire a lot of that out, but that has it’s own trade-offs, right? We did hire someone to do our weekly lawn work, and I have lots of hands to help clean, but it all quickly became a burden with our busy schedules. I cannot imagine how a dual-income family with kids in public school and lots of activities do it.
Bottom line: if you travel a lot or have a busy work or social schedule, really consider whether or not you want to devote your “spare” time to all of these additional responsibilities. As much as I love having my own space, I sometimes wish we’d considered a condo or townhouse!
Your True Priorities
This is probably the biggest reason we wish we hadn’t bought a house, and also the least obvious one when you’re considering buying a house. Buying a house is expected. It’s a large piece of what we consider the standard “American Dream.” You got to college, get married, buy a house, and have babies. We hear all the time about how great an investment buying a house is, and the general perception is that renting is only for those who “can’t” buy a house. When you’re a young couple renting, you dream of owning a home so you can paint, and DIY, and “put a nail in the wall wherever I damn well please.” We crave the freedom of being the masters of our domain. But when it comes down to it, maybe it’s not all that it’s cracked up to be.
I can’t say we’ll never buy again, in the same way, I can’t say I’d go back and change buying this house. But I can say that home ownership doesn’t suit our current family priorities. We’ve developed a love of the outdoors that means we don’t spend all that much time in our giant house. Even when we are home, we find ourselves gravitating to the same areas of the house, leaving much of it unused. We find ourselves wishing that the money tied up in our mortgage payment could be freed up to fund more travel. And now that we know these lessons, we’re going to do something about it.
If you’re thinking about buying a house, I encourage you to step back and really evaluate your individual situation and priorities. For the right people, in the right season, buying a home can be a wonderful, fulfilling thing, but I hate the idea that others are in the same boat we are, sacrificing what they really want in life to follow the “American Dream.” If that’s you, be encouraged to step outside of the norm and chase the new American Dream…happiness and freedom from other people’s expectations. You won’t regret it.