I often think about this and wonder why people purchase homes that costs them their life!!! They have to work and work to pay and pay, not just for their homes but for everything they HAVE to put in them.

I see people moving "up" when their children are teenagers and I wonder why, when in a few years the kids will leave home and they will have this huge house with a huge mortgage when in reality thats the time you should be able to enjoy life and not work constantly to make ends meet.

For us, I'd prefer to have a smaller home with no mortgage than to go into huge debt to have a large home and have to work our whole life to pay it off.

We purchased our home at $26,000.00 (cash) and our taxes are $250.00 a year and we have a 1,500 sq. ft. home but we purchased it in a small rural town away from city life. Although we had to change our dream a bit, we did rather than go into huge debt at our ages.

Friends of ours purchased a home recently and they'll be paying for it until he is 70 (if he lives that long).

Thoughts!!

It's too bad for some that they don't realize the home owns them until it's too late, we took a mortgage that either of us could pay if the other couldn't work, this decision has saved us from the street... We paid close to what you did, we paid 26,200.00 for our home, it's 1450 sq ft upstairs and the same downstairs.... The house is 100 years old and a dream home for me..... I won't be "Moving up" I'll stay right here........ We bought it from people that have "Moved up" and gotten in too deep, so they sold the house for what remained on the mortgage to get out of paying two..... Very sad..... Good for me though......

I see this too. Honestly if we had bought a house before finding this website we would have bought one for too much. Right now we are saving to buy a house, but we will not rush when we have the down payment. We will look until we can find one that we can pay off within ten years or less, and we will live in it for the rest off our lives.

I am also saving for a down payment on a house and want one that I'll be able to pay for in ten years or so. I have done some looking around*dreaming*and can hardly wait.

I don't know why people feel the need to be in a pissing contest with the world- having to have the biggest and the best of everything. You can't bring it with you when you die.

I could be living in a cardboard box and I wouldn't care- as long as it's mine- I don't care what anyone else thinks of it.

Laura

My DH digs basements for new homes. You would not believe some of the homes that are going up around here. One he did recently sold for over $700,000!!!! He took me through it before it was done, and I can't see where that money went. They had a master bathroom all done in sort of like a chipped marble. It was UGLY! After they moved in, they put on a deck and put in a swimming pool. Yikes! :yikes: I think people are slaves to their mortgage payment. I honestly don't know how they sleep at night.

I have heard that there are mortgages now on those big homes with the big price tags for anywhere from 80 to 100 years :yikes:!
Can you imagine that?:bang: What are people thinking? Is it really THAT important to live like the Jones's?

When we were looking for a home 9 or so years ago the realator was showing us houses we could not afford one one income. We held out ,stood firm and wound up with a house we could afford. Sometimes it seems to some the term "afford" means you are of little means. I say you have more smarts than the rest. When it comes to a good nights sleep & thinking of my mortgage payment, I sleep very well.;) A very important componant of the everyday & lengthens my happy content life.

I was a mortgage professional and a real estate appraiser at different points in my life, so I have seen this phenomenon up close and personal. Some people seem to get caught up in the excitement of buying a house, and they don't understand that what the bank says you can afford may or may not be what you can really afford. When a lender tells you how much loan you qualify for, they haven't considered ALL of your monthly debts....it's up to YOU to have a grip on what your actual monthly expenses are and what you can truly afford.

Despite all of my exposure to people losing their homes by getting in over their heads, when we started looking for a house a few years ago, I had a VERY difficult time making the decision to purchase below our buying power. I knew it was the right thing for us to do, but my dreams of having a brand new, nobody has ever lived in it house were pretty strong, too. Fortunately, I came to my senses and we bought a 32 year old, one owner home and we are very happy....and our mortgage payment is less than some people's car payments:). When DH lost his job last year, we were able to make it through that period of time without incurring any new debt.....if I'd bought my "dream home" back then, it would have been a nightmare for us for most of last year.

Good for you Katiebug! I'm happy that you've been able to weather some low spots due to your common sense. You should make more posts about what you said about the things you saw when you were in the mortgage business. I think those things might help others who are just starting out.

Gosh! Isn't this so true!!

Our first home owned us for over 2 years. After that, we learned.

We had our temptations along the way, but didn't make the mistake of buying the little mansion my hubby wanted, thankfully.

When we moved back to Texas, we bought in a price range most of the first time home owners buy in when choosing a new home. It was 15 yo. But, I had wanted that floor plan since we had lived in the one we couldn't afford.

But, this time we were able to put 50% down and have a very comfortable house payment. We were going to pay it off in 8-9 years.

During this last year or so, it has been a challenge to keep bills paid due to employment issues. But, we couldn't move into an apartment for much less.

What does unnerve me, however, is our taxes are now the same per month as our Pinicipal and Intrest payment.

When I was a Realor, only the very posh areas had taxes this high. So, we may choose to move later in life. Who knows? :)

First of all I cannot imagine finding a house for $25,000, that is fantastic. Even starter homes in our area are much closer to $100,000.

I agree with Katie, I know too many people who wait to hear from the bank/mortgage company how much they can qualify for. I know our broker was amazed that we didn't get half the payment we could qualify for but I wanted balance in my life and did not want to be a slave to that payment. I see in my neighborhood where people obviously overbought because they still have sheets on their windows after several years.

I have also seen so many new houses already on the market and I am sure that it was because they were too much to start with then with the downturn in the economy they couldn't afford their homes.:(

I just love my 1500 sq. ft. ranch! It's comfortable, we've done a lot of work fixing it up through the years, and best of all, IT'S PAID FOR!:)

I too live in a cheap house, though not as cheap as $25000. That is fantastic!!!! Ours was $42000, $37000 after the down payment.

I can not phathom who is buying all of the huge houses that have been popping up in our area. There just isn't that many good jobs in this town, I don't know how all of these people are getting approved for them. Although if they have 100 year mortgages, that would explain a lot.

Our plan when we bought this house was to get something we could still afford if dh lost his job and had to work for minimum wage. Thankfully dh has not lost his job, but our house payments are really low so if he did, we would be okay.

When we were house shopping 16 mos ago we were approved for a mortgage in the $250,000 range. Where we live, that is a median range. We decided though that with dh being 35, we were not up for the challenge of 30 years. We found the house I wanted on a lg property for $189,000. It was a steal at that price, estate settlement, has already gone up in value and we should have it paid off in 10 years. Because we have no other debt, the bank was willing to write a check for whatever we wanted, I couldn't do it.
One of my best friends signed on a house with her fiance this week, it is in the $600,000 range. Last week they bought a $40,000 Lexus for her to drive his teenage kids around in and she quit her job this week to be a housewife. I truly believe she has lost her mind. She is now looking at furniture to fill this house with, plasma tv, leather furniture etc. Last month he bought her a beautiful engagement ring, minimum $5,000. Yes, he has his own business and is doing well, but, there is also a point of saturation, when does it stop being about your buying power.

Where we live homes go for $120 and up and our neighborhood is expected to go up to $140000 by the end of the year. Through God's blessings we were able to buy our home for $110,000 and we live in one of the only inexpensive areas of CA left. Our plan is stay here for 5-7 years and, sell for a profit, and buy a home closer to our family in the country on a nice big plot land, so we can do the things we really want. It's not to keep up with the Joneses, but we have friends who do that and they are suffering or end up not liking the home. I'm grateful for my home and we're enjoying ourselves here.

I live in a small rural town like CJ and homes here are very reasonable here, in this area you can buy a very nice home for under $60,000. It just amazes me that some people will buy a home that they will never be able to pay off. I will only buy a home if we can have it paid off in 15 years or less. I would not want to know that I would not be able to retire before age 70 or older because I still had a mortage to pay on.

Blessings,
Kathy

I agree totally with everything said here....we got a brick 3 story house at auction for $69,000...it was appraised at $87,000 at the time and we have done some improvements. We both love our house, it has plenty of room and a nice fenced in back yard. Our house payment is low enough so that when I lost my job last month, me dh and I made the decision for me to be a stay at home wife and soon stay at home mom. We could not have done that if we had bought a house for what the bank had approved us for. A couple we know bought a really expensive house, and are now suffering for it. I'm very happy with our home and the frugal way we live :D

When Dave and I were looking for our home, the realtor & bank kept telling us that we could afford a house that was $100K more than what WE figured out we could afford. Thank goodness we didn't listen to them because when we bought, we were both working....I wouldn't have been able to become a SAHM if we had bought those more expensive houses!

I think the dream of buying a home is so far out of reach of most people that anyway they can they will try to do it. Whether they are slaves to the payment or not they don't care they just WANT that house. We moved last year from Las Vegas to this small town in Michigan, talk about a different lifestyle! Houses here were low enough that we paid cash for ours and only have taxes to pay it's totally cahnged our lives and even though we don't really care for this area we refuse to move back to thw est coast right now because honestly we don't ever want to have to work so hard to just make "ends meet" like you have to when you have a house payment that is so high.

When my ex-husband and I purchased our first home, the lenders qualified us for a loan amount based on my ex's regular salary and "Overtime" :toothy:
Fortunately he had no problem getting the overtime, but then on the other hand he worked alot and that wasn't good.
Now the lenders are offering 40 year loans. I've read in a couple different articles that the last time lenders offered 40 year loans was right before the depression.

I'm so glad to hear you guys saying the same things I'm thinking!

I wish we lived in a less expensive area, but around here, CONDOS go for 130 on the low end, and 170 on the higher end (can be more), and that's for 2 bedrooms, 1 bath PLUS association fees ! Can't get a house in this area for under 200,000, and that's a giant stretch. I'd say the general range is closer to 300 - 350. That is like quadruple what we can afford right now.

We are going to moving next summer, and have to get a 2 bedroom place. That, a fairly good school district (a SAFE one), and close enough to our jobs were the only requirements. Even with the least restrictions, we couldn't find a place unless it was a condo. I rearranged our budget so that we could squeeze out the money for it, but we would have been REALLY tight financially (like without my work bonuses, we would have no money for savings or emergencies). All it took was one fight over it for me to decide it was not worth it, and that we should just rent until we could buy. It will make life much more pleasant.

I figure we'll buy after our next baby is into first grade, that way we don't have to worry about not having enough for daycare (we both work), and can save more for a downpayment and "emergency" money.

I'm good with renting if it means we'll not have to fight over money!!

Forty year mortgages is absolutely NUTS.

Say you take a mortgage out at 35 - 40 years old (or even older). You'll be a senior before its paid off if you just make regular payments. I do know people who will still be paying their mortgage when they get their old age pension. What do they plan on living on???

My brother is one. He is now making mortgage payments of $1500 per month. He is 55 and has years to go on it. The truly sad part is he had his home paid for and then mortgaged it to the hilt so that he could get his master's degree and pay off debt!!! Now he is once again up to his eye-balls in debt and will be paying for his home when he is 75.

This blows me away, too. I can't understand why anyone's dream house is so BIG. Property, maybe, if you like privacy and/or you want to use the property for farming, hunting, etc. But I can barely keep a 1000-sq-foot apartment tidy, let along a large house!! :toothy: I wouldn't want a sprawling house unless I was so rich, I could hire someone else to clean it!

We were pre-approved for a $350 000 mortgage and we laughed hysterically. Yeah, right. We're not paying more than 150 and we're paying it off as fast as possible. Debt stinks.

I've always figured the bigger the home the bigger the other costs of owning it are too.

The mortgage is higher and so is the interest, not the rate of interest, but since the amount is higher, so is the amount you pay in interest on that long and interesting loan for your interesting house. :toothy:

Taxes are higher

Insurance higher too

Heating is more, lots and lots more (my friend with a nice big house pays double for heat than I do)

Electric costs (air conditioning anyone?, lighting, vacuuming that monstrosity) are more too. Her big house takes a lot of dollars to keep cool. Again about double my electric bill and I've still got an adult kid living with me and dh. She and her dh are empty nesters.

And as for personal energy, I know that when we downsized it took a lot less of my time and energy to clean my smaller home. When you look at working couples that might mean the difference between managing on your own or needing a cleaning lady.

So when looking at moving on up, it is sure helpful to remember to double the costs of insurance, heat, light, mortgage and interest, and taxes and add in the potential cost of a cleaning lady.

So it's not just an extra 800 a month on a mtg payment over and above what you pay right now (including interest).

It may mean an extra 150 a month on heat and light combined plus another 50 to 100 a month more for house insurance, and another 50 a month in taxes.

Cool you could end up paying an extra 300$ a month, you werent' expecting

oooops and now we need a cleaning lady

oh and forgot about maintenance. It's time to re roof, and that monster house has a BIG honking roof so count an extra 2K for roofing jobs.

mmmhm and then maybe double or triple the cost of paint to repaint inside or out.

so another 50 a month for extras in maintenance and that cleaning lady might be more.

Good point Margery - plus the house doesn't necessarily have to be bigger but could be in a more affluent area which means that the new owners don't want to bring their old furniture into their new home, so they buy new furniture. Then they realize that their cars and clothes need to be upgraded to keep up with the Joneses and it just becomes a vicious cycle, expensive and costly in more ways than just financial.

I do know a couple people who bought more than what they could comfortably afford. One is friend of mine who used to stay at home with her kids. Now, she's back working her buns off to chip in and pay for their McMansion. ACK!

We built our home from the ground last year and it's most definitely not the biggest house around, but the mortgage suits us great! We didn't build more than we could afford. Oh man, we could have though. Some of the floorplans the builder offered were beautiful... and the options! OH THE OPTIONS! :D We could have added a room or had the basement finished or had Corian countertops or a wider driveway or a whirlpool tub... :laugh: I could go on and on, but we couldn't afford all those expensive (and some unnecessary) upgrades. We got what we could handle and I'm so glad we did. I don't worry about the mortgage or much else, but if I added that extra bedroom and the finished basement, I would have been worrying right now.

My friend... poor thing. Her house is SO big and there are only 4 people in her family, including herself. It's a small mansion in a really nice development. She moved from a house about the size of mine (2100 sq. ft.) into that big mansion. It's beautiful, don't get me wrong, but her and her hubby are ALWAYS working. :(

Oh you are a wise one Maggie. Our realator tried to talk us into a bigger house with a bigger mortgage, nope, no thanks... I want to be able to sleep at night.;)