The Financial Dangers of Buying Homes
Buying a house is a cultural milestone in the United States. For many people, it represents being responsible, financially stable, and ready to start a family. However, there’s a great deal of talk about the lack of home-buying from younger generations. It’s even affecting the current financial market. What are financial risks and dangers to buying a home? Should you become a homeowner, or does the modern generation know what it’s doing? Let’s take a look, so you can make the best decision.
The Inability to Move
Most high paying jobs center in bigger cities. If you’re let go or find yourself quitting your job in one city, the next job may be in a different city or state altogether. A lack of job security can lead many people to distrusting the idea of homeownership. After all, it may be easier and more financially responsible to rent a house or apartment, instead of purchasing a home you would then have to sell or rent out yourself. At the least, being able to move to a different side of town and thus reduce your commute time can financially benefit you – an option unavailable to homeowners. Finally, if you discover yourself falling on hard times, it’s easier to find a family member or friend that’s willing to let you rent a room, instead of cutting back on other expenses like insurance just to keep your house!
Mortgage Payments vs. Rent – Not So Different
Whether you’re paying the landlord or your mortgage, you’re still paying someone. While paying a mortgage has the benefit of eliminating leases, the possibility of getting evicted, and the danger of rent increasing, you still have to pay someone every month. You’re just trading out who you pay the money to. As such, the advantages of owning a home may not be notably different, financially speaking.
If you’re also knee-deep in another loan, taking on more debt is extremely dangerous. This is especially true if you lack a job that can easily pay off both debts at once. Additionally, depending on your credit score, you may not be offered the best rate of interest for your home loan.
Maintenance and Surprise Expenses
Once you’re a homeowner, you’re on the hook for everything that happens in and to your house. This includes leaky pipes, broken windows, and stained carpets. Though some expenses can be put off until later, like cosmetic issues, you’re still responsible for handling (and paying for) any damages yourself. All in all, being a homeowner isn’t always the right decision for everyone to make.