Toronto Star: 4 home-buying lies we tell ourselves

[marmar]

4 home-buying lies we tell ourselves

September 19, 2011
By Krystal Yee


There is a lot to think about when it comes to buying a first home, and sometimes the decision can be overwhelming. But after purchasing my first home in Vancouver earlier this year, and with so much talk about a coming housing correction, is renting a better option?

There is definitely a perception that, once you’ve become a homeowner, you’ve somehow 'made it,' which means it can sometimes be hard to think rationally about the purchase. Especially when you’ve fallen in love with a property, or convinced yourself that you can afford a home well outside of your price range.

Here are four lies we often tell ourselves to justify home ownership:

The bank wouldn’t lend me that mortgage if they didn’t think I could afford it: Unfortunately, the bank isn’t your friend. They are in the business of making money for their shareholders. They are perfectly willing to lend you more than you should borrow. Why? Well, because you’ll likely cut out your retirement savings, vacations, and that new car you’ve been wanting, rather than default on your mortgage. And the bigger the mortgage, the bigger your interest payments to the bank.

Once I get that raise, things will be better.: This might be true statement when you’re trying to get out of debt or save money, but when it comes to paying for the biggest purchase of your life, is it smart to be counting on money you just aren’t certain you will have? ...........(more)

The complete piece is at: http://www.moneyville.ca/blog/post/1056473--4-home-buying-lies-we-tell-ourselves?bn=1

[ananda]

1. I rent and . . .

. . . it's been a financially sound deal. I just can't justify buying a home
in this market. I go into sticker shock at any price above $100,000.
That probably sounds funny, but homes are WAY overpriced, imnsvho.

[itsrobert]

2. Homes here in San Diego area are well over $400,000

Talk about sticker shock. But these homes were going for over $700,000 just 4 years ago.

[w0nderer]

3. it's really hard to make people see these

especially the 'the bank isn't your friend' thing

"but my personal banker"
with commission on loans, where would the loyalty be?


"they need to make money too"
do you usually run around telling grocers to charge more?
electricians?
lawyers?
doctors?
then why do bankers get that special treatment?
they have highly paid executives with the sole responsibility of making sure the bank makes money, they make pretty nice bonuses even

bankers have people in the working class indoctrinated

[LibertyLover]

4. We rent and I wish we owned our own house again

The people we rent from don't have the money needed to fix the house, so the dryer doesn't work and won't until my husband gets around to repairing it, which he won't do until I've paid off my car in 2 months, so I wash the clothes at home and drag them to the laundromat to dry them. The roof over the dryer leaks because the people who own the place really need to put a new roof on, but don't want to because 1. they can't afford it and 2. they want to add on to the house eventually so they don't want to waste money on a new roof that in a few years will be torn down. It sucks renting from people who, while personally very nice, can't afford a second house and never should have bought one as an "income" property. Next time we rent we will much more careful about things.