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H's Housing Conception

March 15th, 2010 at 08:19 am

So a couple weeks ago I was talking to my Husband about when we buy a home trying to pay it off quickly. He was completely confused. He thought that the entire reason you own a home is so that you can borrow the appreciation...well I was floored. I was in such shock that I ended up spluttering about how that was a bad idea before I could finally point out that paying off a house means no housing payment.

I realized where this idea comes from though, our parents. His parents and mine have used their homes to finance business ventures, their children's college educations, and home repairs. They treat their homes like they already own it entirely as soon as they moved in.

This whole thing has me thinking about inheritance and my goal for my future children. I explained to H yesterday that I treat children as a luxury good. This stance means that I must first plan for my needs, such as retirement and housing, before I have a child. I do not want to burden my children with my debts. My greatest hope is to leave my children a payed off home, a leftover IRA, and maybe something more upon my death, not debt. Sadly I fear our parents have not followed the same philosophy. My parents say that they hope one day to leave us their beach house, but that will be impossible considering they just refinanced at the age of 60 so they could afford the payments.

Considering a House

February 22nd, 2010 at 10:48 am

So two weeks ago my husband and I began to consider if we could purchase a house. We were tempted by the tax credits and pressured by our parents. I was determined that we would only enter into a mortgage if we could save money with appreciation only matching inflation (I have major housing bubble cold feet). From being a grad student, we currently live in subsidized on campus. Because of the horrible job market for teachers especially in our county, my husband works over an hour away. This all contributed to a spread sheet of items which would determine the max interest we could pay and still be saving more with a home. The considerations included:

Credits
Rent Payment
Housing Tax Benefits
Interest Saved by overpaying with Current Downpayment Savings
Renters Insurance
Auto Insurance Decrease
Husband's Decreased Driving

Debits
Current Interest Earnings on Downpayment
Utilities Increase
Maintenance Costs
Home Owners Insurance
Property Taxes
Melissa's Increased Driving
Homeowner's Association Fees
Moving Costs
Home Setup Costs
Closing Costs

From all this, I estimated that the most we could afford in interest would be $430 a month (remember subsidized housing) without losing money. Knowing we can get very subsidized loans because my husband is a teacher, we are looking at about $150,000 including downpayment. In our county, that just is not going to happen.

Are there any credits or debits I'm not accounting for?