My dad often said: “If you think you own your own home, just stop paying your mortgage and see who actually owns it!”
And every month when I go online to pay me, I ask myself this question: “Who actually owns your house, Joan?”
Yes ... Who owns it?
What an annoying thought.
However, isn’t it fascinating that even with this sage advice I still bought a house in the mature YOUNG age of 20 years. It's a pity two years and I went to the mortgage market.
Keep in mind that then the mortgage companies did not take into account the income of the wife. I don't care that I have been working since teenagers.
And, do not forget that our credit points went the way of her husband. Wives and women did not have credit scores, by law, until the mid-70s. 1974, to be precise, with the Equal Credit Opportunity Act (ECOA).
So I managed to move into a mortgage with a lot of obstacles, lack of rights and, as my dad said, “Who the hell owns this property?”
Not to mention, since then I have “owned” seven houses. They all had mortgage loans. ALL OF THEM! How insane!
American dream - when did it become about owning a home?
Have you ever wondered who coined the term "American Dream"? He not only motivated this term, but somehow managed to convince us that we could dream.
The dream we all grew up believed in the truth, the only way to live successfully in America.
You would be surprised to know that the American dream was the brain child of James Truskol Adams. A man born of wealth, who began his career as an investment banker, turned the writer and historian into his later years.
He convinced us all that we could dream.
He had a hunger after the life he described: “A life in which everyone can live a rich life, where opportunities abound, and the barriers of the past do not interfere with our progress.” (What is the American dream in 2016).
But when did the American dream turn into a house in the suburbs, a white fence, 2.5 children and a dog? Most will say that it began in the long-gone 1950s. And yet this dream is still very much alive today.
So, if 50 years have passed, why are we still hungry and want to have our own home? What is it that we so firmly held on to the dream of the past?
Here are seven reasons we use to buy a house ... Reasons that I also used, along with what I heard from customers, friends and ... well, almost everyone who bought the idea of Owning a House.
Capital. The money paid for the rent is money that has never been seen again, but mortgage payments create an interest in equity participation.
Tax breaks. The US Tax Code allows you to deduct the interest you pay on your mortgage, property taxes, and some of the costs associated with buying a home.
Appreciation. Historically, real estate had a long-term, steady growth in value.
Saving. Creating equity in your home is a complete savings plan.
Predictability. Unlike renting, your fixed-rate mortgage payments do not grow over the years, so your housing costs may actually decrease as you own the house longer.
Freedom. The house belongs to you. You can decorate everything you want and choose the types of updates and new amenities that appeal to your lifestyle
Stability and safety. Having stayed in the same area for several years allows you and your family to build long-term relationships within the community. It also offers children the benefits of educational and social continuity.
Yes, all these reasons. Pretty darned good too, right? BUT, is not it?
Then why are we Americans more financially stretched than ever before? Is home ownership of everything and finishes everything to live a full, successful life?
What about the disadvantages of buying a home? Did we really stop and examine them before we jumped in, making sure that the water was ok?
Here are a few drawbacks to consider -
Rent vs purchase. What about the costs of maintenance, maintenance and repairs? Would it be nice if these costs were outside of someone else, and not among you? Hot water heater dies - not your problem!
Let Math. You lose every time, if you think that a mortgage loan helps you with your taxes, and not collateral.
Remember 2008? Many Americans lost their homes, made a short sale, defaulted on their mortgage loans and owed more than the house was worth. Real estate is not always growing!
Built-in savings? Not really. Without you, you plan to sell your house and not buy another.
Debt is debt. Ever figured out how much you would pay for this house if you bought it with a mortgage? That is, if you EVER pay it off? But let's turn to this, most Americans will never do this and will be burdened with a mortgage for life.
Property taxes and insurance are not reduced.
The surroundings are changing. Who else lives in the same house for life?
And do not forget that the American dream has changed again - not only the house, the picket, 2.5 children and the dog.
Now we must include student debt care (education), because of pocket spending on health care, and pension funding no longer applies to employers.
Oh, and let not forget a brand new car every couple of years, which costs more than the houses that were worth.
I say, do not buy a house? Do not buy a good car? It's my pleasure. I do not want to steal your dream.
What I want to convey, propose, encourage and refer you to,
Make sure the dream is really yours, not someone else.
Not a government. Not IRS. Not a realtor or mortgage lender. Not your parents, other family members or friends.
Because, following the path of someone else's dream, as a rule, ends with you in suffering. Trapped. Brock. And often live with regret.
Not to mention the bucket load!
With this in mind, the last sentence - do it without debt!
