“Should I buy a house?” This is the problem brought by listeners Miranda. Explain to me Vox’s weekly call performance. “I think this has been the preferred investment for the past few generations,” she said. “You buy a home, it’s your retirement plan, and it doesn’t seem realistic or even impossible to achieve.”
Miranda is far from questioning whether home ownership is still a reliable engine for building wealth, as has been the past few generations. The United States is in Housing shortage As millennials and Gen Z reach their primary homebuy years, but many are locking market. Gone are the lower post-recession rates, while homeowners’ net worth is overshadowed.
It’s a complex calculation that Mandi Woodruff-Santos knows very well. she is Brown ambitionWealth and Finance podcasts. “I bought a house in 2018 and it felt like a thousand years ago,” she said. Initially, she didn’t sell it completely under the idea of home ownership. “I didn’t realize that I wanted to really own a house until my husband thought, ‘Let me get out of this concrete jungle! I want to touch grass.’ Eventually, a house outside New York City won her victory. “We were able to find homes in a great community within walking distance of the train. I saw this little house and I thought, ‘I want that house. ‘That’s how I ended up here. ”
How do you determine if home ownership is right for you? If not, what other ways to build wealth? This is the topic of discussion this week Explain to me Length and clarity have been edited. You can listen Apple Podcast,,,,, Spotifyor Wherever you get a podcast. If you want to submit a question, please email askvox@vox.com or call 1-800-618-8545.
Over the years, we have been told that buying a home is an important milestone in adulthood and the first step in building equity and wealth. However, with current prices and interest rates, the feeling of entering barriers is particularly high. What suggestions do you have for buying a house?
Just like when you become a new mom: Don’t get any parenting advice from people who have never been a mom like in the past two years. You need fresh Intel for so many changes. If you also get advice from parents, relatives and frankly journalists – we tend to be on the older side – if you get advice from people in the current market, that doesn’t apply because they buy it in a completely different environment.
Some of the choices I made in 2018, I will never tell anyone to make it now. I think it’s really wise to ask for comments and be open-minded, but just understand the context in which they are giving you advice.
What questions did you ask from our audience? Are there things that should be done to buy a house?
If you know maintenance, if you understand the value of a property and how it is affected by things like development and weather patterns – if you know all of this stuff and still really want to buy a home, then, yes, go, go to your house! The ultimate thing is – can you afford it?
If you are getting advice from people in the current market that are not in the current market, then it doesn’t apply because they bought it in a completely different environment.
Now, there are all kinds of thinking about whether trains are a good investment. I think you have to understand why you want to buy a house. Are you buying a home for your family that can live in for the next 10 years? This is a very different equation for me, if you are buying a home that you want to repair and flip in a year or two and you want to see a higher ROI. But if you are someone like me, it’s “I want a place where kids can grow up”, then it’s related to the current market ebbs and flows, and more about it’s a good long-term decision for me.
So if I’m considering buying a home, what I’m going to look at today is the mortgage rate. They are not cute now.
But they are not as ugly as they can be. In the 1980s, people just walked out at double-digit rates. So, interest rates aren’t high, but they’re not the worst they’ve ever had.
What’s more difficult these days is inventory. I will not only buy things there, because you want to buy things. If you can wait, wait until you find the home you really like and suit all your needs. worth. I get my cute little 2% interest rate when someone is trapped in the entry house, but I am in the smallest small house nearby and we are standing out from the seams.
Also, take a look at your lifestyle. Ultimately, this is your choice. You will live in it. Find out what you want.
So if you sit down and find yourself in emotional position, in lifestyle, and make sure that buying a home is right for you, what is the first step? What do you recommend to do alone?
Your credit score will determine the cost of a mortgage. I want to say that before you think you’re ready for six months, you want to check your credit and make an assessment. Mortgage rates are now around 5%, 6%, 7%. If you have bad reputation, they will be higher. You want to avoid getting additional loans within six months of applying for a mortgage, because mortgage lenders don’t like seeing new debts before they may approve your loan.
If you can wait, wait until you find the home you really like and suit all your needs.
Ideally, you won’t have volatile income. So if you’re going to find a new job, that’s great, but it can make it more complicated. Your lender wants to see a few years of income and they want to see that from an employer because it is about them wanting to choose a very reliable candidate for their loan. So for my freelancer, my entrepreneur is like me, it’s not impossible, but you might want to talk to an accountant about how to build a business so that you can pay as a W-2 employee.
In addition, savings exceed down payment. These things pop up and nothing is worse than realizing that you don’t have money in the bank.
If you are a first-time home buyer, I will definitely take the time to research the first-time home purchase procedure. There are some people in the federal government – the Lord knows what is happening to them right now – but check out the website of the Ministry of Housing and Urban Development. Check out the Federal Housing Administration. See if you are eligible for a first-time homebuyer loan. There is also a program called NACA, based on homeowner education. So if you go through their educational program, they will help buyers who may not be the most sales candidate to get a mortgage to get ownership of the home. Local banks have credit unions – you may find state plans.
So if you want to buy a home. But say you can’t buy a house or don’t want to buy a house. How do you establish an equity? What can you do?
Yes, a house can be a vessel that increases equity and builds wealth. But this is not the only game in town. Have you heard of index funds, mutual funds? You can absolutely invest in the stock market, invest with 401(k), and make the most of your Roth IRA.
Also, invest in yourself. I’m not saying to get a brand new degree. What do you think of life? And if this is your trip, if it helps to care for family members, if that is the city you always want to move to, or just take the opportunity and invest in experience that matches your worth and what you want. At the end of the day, you can review it and say, “Yes, I did it for me and I don’t regret it.” Who said it wasn’t a wise financial decision? Maybe a calculator or an economist, but at the end of the day, you have to live with yourself.
I like this approach because there are all these different ways of funding and I don’t think there is a “right way”.
I’m not trying to add sugar to the entrepreneur’s lifestyle, but when I say investing in myself, maybe it’s investing in the business goals you have, but put aside some of the money you can start making money and saving when you work 9 to 5. Invest in the business ideas you have. Who can say that if your business works well, then your business won’t have a better ROI? Who knows?
