You should own a home because you have to live somewhere. You have two choices, rent a place to live or own the place you live in. As long as you are paying rent to live somewhere, your hard earned money is going to pay down your landlord’s mortgage. When your landlord goes to sell the place you are renting, she will not only reap the proceeds from the rent you have been paying but will walk away with a huge chunk of money earned as equity that you contributed month after month and possibly year after year.
A case in point. When our son entered college, we purchased a four bedroom house near the college he was attending. He found 3 friends to move in and pay rent. The amounts divided by 3 covered the mortgage payment. Not only that, they split the utilities water and garbage and cable by 4. Upon graduation, they all moved out along with my son and we rented it to a family who resides in it to this day. My son got a mortgage and purchased the house from us. He has never paid a mortgage payment out of his pocket to this day. Other people, including his roommates have and are basically paying for this house. One of his roommates after moving out, bought himself a house and is doing the same thing. He has roommates that are now contributing to his mortgage payment and sharing utilities. The other two are still paying someone else’s mortgage.
The real question is, why would you not buy a home?
Some might argue, I don’t want to be responsible for the upkeep, mowing the lawn, fixing the broken things, worrying about not being able to pay the mortgage. And that’s a fine and dandy excuse but not necessarily smart. The people who buy the homes are going to walk away someday with a sweet little pocket of extra cash when they go to sell. It’s better than the stock market because the only person that is going to sell it off is you and you get all the proceeds. If you don’t want to mow the lawn; buy a condo or a town home. You can find homes with little or no yard. Some associations even cover the upkeep of the front yard. My son’s did. As a rental it’s a sweet deal because renters tend not to keep the yards up anyway.
Statistically, homes increase in value approximately 3-4% a year. That’s a nice little investment. And with each mortgage payment you make, in reality it’s like putting money in a savings account because it pays down what you owe and when you sell, you get it all back plus what you gained in equity.
If you think you don’t earn enough to buy a home, ask a lender and find out. There are lots of programs out there to help people become home owners. The government just revived a previous loan program “Pathway to Purchase”. The program provides down payment assistance. It can be used for either the down payment or closing costs.
Now you have no excuse. Get off the couch and go buy a house.
Copyright © 2018 Noel Anderson. All rights reserved