There comes a time in every adult’s life when the urge to buy a home comes along. Maybe friends are buying their first houses, or your elders are telling you how important it is to build up equity, or maybe the TV pundits are saying what a great deal house and mortgage prices are. Either way, the home-buying bug has bit. But, should you own a home? I’m about to buck the great American home ownership narrative,* and say that there are going to be people in situation where home ownership doesn’t make sense, and that’s OK. let’s think of a few situation where home ownership, generally,** wouldn’t make sense:
- An unstable job or living situation: let’s face it; if you’re going to be shipped out, moved to a new community for work, or will have to look for work in a different community, it would be a bad plan to buy a home. Why? It’s very expensive to buy or sell a house, so buying and selling houses frequently can mean lots large expenses, repeatedly. Also, if you’re in an unstable relationship, it may not be the time to buy a house with your significant other. After all, if the relationship fails, getting rid of the house can be a nightmare-and-a-half.
- You can’t take care of the apartment you have now: if you can’t manage the insides of an apartment (where a landlord takes care of all the maintenance),*** how do you expect to manage both the insides and the outsides of a house? Keeping up a home requires regular maintenance of the lawn, exterior, interior and mechanical systems of the house. You need to either be able to maintain your house, or be able to recognize trouble and hire capable people to maintain your house. If you don’t have the inclination and discipline to maintain the home, maybe you shouldn’t be buying one.
- You can’t afford it: If you can’t afford it, don’t buy it. Since most people buy their homes with a mortgage, you need to be able to afford the payments, private mortgage interest, property tax, and homeowners insurance. This stuff adds up. If you can’t afford a home in your area, then you can’t afford a home in your area. It’s too bad, but if that’s they way it is, either work on making more money (my favorite method of affording things), or hope that prices get down to your ability to pay.
- You don’t have much financial discipline: It’s OK, most people don’t have much financial discipline, and you can still have a good life without much financial discipline.**** If you make plenty of money but can’t pay your bills when they’re due, regularly overdraw your checking account, and just can’t seem to save up for a down payment, you probably shouldn’t buy a house. Even if a lender is willing to lend money to someone who can’t handle their money well, it’s probably not the best idea for someone who can’t handle money well to go into debt for 15 to 30 years. That’s probably not a recipe for success.**
I know there are plenty of people who would look at this list with a judgmental attitude. I don’t. None of these situations are bad or wrong, they are what they are.
Can you think of any other reasons someone shouldn’t get a house?
* It goes a little something like this: “Owning a home builds citizenship and community, and makes you a superior person. It will also be the bedrock of your financial wealth and is the American dream. If you don’t own a home or are trying to buy a home, something is wrong with you. Commie.” Or something like that.
** G E N E R A L L Y. See you financial advisor for specific advice customized to your particular situation.
*** Hypothetically. Your mileage may vary.
**** If you just aren’t inclined to develop financial discipline, please, please consult a financial planner. Us financial planning folks have all sorts of tips, tricks, and tactics to make sure you save the money you need for your life goals, and we can set up systems that get you where you want to go.**