Should I Avoid Home Loans?

**Wooly Milk** · 10-05-2008, 03:34 AM

I am 24 and I live with my parents. I hoard money, have no debts, spend only 10% of my income, and so far I have managed to save up $35,000. It's not that much because I've been in university for a while.

I am told by many that I must move out of the house. However, I am told that I should avoid debt. The rule is, "If you can't afford it, don't buy it." I can't afford a house, so it follow from this rule that I shouldn't buy one. However, many people who think they are frugal seem to think that the house is an exception. Is it? If so, why?

Should I go into debt to buy a house or should I save up and buy a house outright with cash? My parents are happy to let me live with them but I must pay them $300 per month.

**Greebo** · 10-05-2008, 08:14 AM

If you purchase a home with at least 20% down, and your mortgage cost is 25% of your net pay or less, you will find the home to be a blessing. Especially if you can get a 15 year fixed mortgage.

Why?

1) The home will, eventually, be paid for. The house, when paid for, is an asset that usually appreciates.
2) What you will pay in interest, especially if you pay off the mortgage early (more early than 15 years) will be less long term than what you would ever pay if you rented for your whole life. (Not right now, obviously, but you can't live with them forever...)
3) Once paid for, tax & insurance will be less by far than rent, and you'll have a place to live for life, so long as you can pay taxes. Insurance isn't NECESSARY once the place is paid but not having it would be foolish.

**ladykemma2** · 10-05-2008, 08:35 AM

one thing to consider is home ownership takes a lot of time, yardwork, repairs, cleaning, painting. can you handle the load of work, university AND home care?

another thing to consider is homes cost an additional 300 or so a month for upkeep and maintenance in addition to all the other costs.

**fernykins** · 10-05-2008, 11:24 AM

Now let me get this straight...... you are 24 yo........have saved 35000........ you live at home ( which is ok with your parents) you pay them 300 amonth rent. And someone (not your parents tell you...you have to move out) Some people told you you should not get a home loan........ Well I would stay with my parents a little longer and continue to save. To rent an apt is more the 300 a month, plus utilitied.. Then I would start looking for a place to buy. You do have to remember that buying a place does require more upkeep so it will cost you more but well
l worth it.
Fern

**JessieMom** · 10-05-2008, 11:36 AM

Having a home of your own is a blessing, but only if you are ready for the responsibility of taking care of all the little things home ownership comes with. It doesn't sound like living with your parents is a problem for you or them & $300 a month is very reasonable - much less than it would cost for rent or own a home of your own. I would say stay with your parents until it's right for you to leave - who cares what other people think?

**Bournecrazy** · 10-05-2008, 12:33 PM

how quick have you savedthat 35k? how much is your ideal house purchase price? how long do you think it will take to save for that price? if its possible to save another year to buy outright if it is i would stay where you are.