I have been working with a sharp young lady who has been advising me on the health insurance marketplace. She and her fiancé recently moved to Washington state from the Denver metro area. After getting business out of the way on a recent call, I asked how the relocation was going. She told me the housing market was similar to Denver (very competitive–prospects bidding way over asking price and offering cash) and said they landed in a rental for a few months. Her tone indicated she felt embarrassed by the situation. I saw an opportunity to reassure her and pounced! I wanted to put my comments to her in writing for others who may be in the same boat.
Let me start with some background. I was a home loan officer for three years and learned a lot during that time. The truth is most people bite off way more than they should chew. They get approved for the highest loan amount and most loan officers will not discourage it because they are getting a commission based on the loan amount. So, buyers wind up as what is referred to as “house poor.” They are unable to save, load up credit cards to afford furniture, food, and vacations, and are likely living paycheck to paycheck. And all to fit society’s definition of successful. If outward appearance is that important to you, go for it…but maybe revisit your values. If retiring at or before 65 and living a comfortable lifestyle when you do is important, reconsider buying the biggest house in the best neighborhood. And maybe, reconsider buying at all.
Competitive housing markets are unsettling–I live in one. Between a new market that made me uncomfortable and a job that I did not want to stay in long-term, I abandoned my plan to buy upon moving to Denver and have been renting. Early on, I also had some feelings of failure. After all, I am a 40-something and should always own a house! Wrong. (Read how owning a house that was too big launched me into minimalism here!) And when I received the biggest blessing and lost that job, you better believe I was relieved to not be paying principal, interest, taxes, and insurance. It also allowed me to store the minimal belongings I had and travel for 46 days without any housing costs. I had these thoughts and plans in my head all along but did not widely share them, I just wore my blinders when making decisions that affect me alone.
If you think buying a fixer-upper for $400,000 (quite realistic where I live) and having no money leftover is worth looking successful to those around you is a good idea, I hope you will reconsider. Every person is in a situation unique to them–put your blinders on when it comes to financial decisions. The best tip I can offer is to find a financial advisor you trust and start there. They will help you work through how much you should be saving for retirement and a ballpark home purchase budget. Home loan officers are only looking at your income and debt, not what you should be saving for your future. You should go into your first meeting with a loan officer knowing what you want to spend and not relying on them to tell you. If you live in a market where houses cost more than you should spend, look at different areas or rent for awhile. There is no shame in renting despite what we have been wired to believe.
“No one can make you feel inferior without your consent” is a famous quote by Eleanor Roosevelt. Your support circle likely does not care how you secure housing as long as you have a roof over your head. And if they are not supportive of your choices, do you really want them in your circle? Do what is best for you and your financial situation. If you are a happy homeowner, wonderful! Please stop assuming everyone should fall in line with the path you chose and craft your comments carefully. I still believe “hike your own hike” is solid advice–I guess that is why I inked it on my body.
the single minimal(ist) 