home “ownership”

For the benefit of others, I’ve written two short lists of the pros and cons of home ownership.Cons of Home Ownership

  • You are still a renter. You’ve just signed a longer contract, and your landlord (the mortgage company) is a faceless dick who thinks of you as another number on a page.
  • Owning is more expensive than renting. When you look at buying a home and think, Wow, that mortgage is less then/ the same/ only $100 more than my rent payment! remember: In addition to rent/ mortgage payment, you also pay the following (this can increase your monthly payment by several hundred dollars, raising a $700/ month mortgage payment to a $1,200/month mortgage payment):
    • Property taxes
    • Home-owners insurance
    • Natural disaster insurance (depending on where you live, this is either flood, fire, earthquake, or tornado — homeowners doesn’t cover this stuff).
    • Escrow payments
    • Additional fees determined by the mortgage company — interest, taxes, fees, etc.
    • All this means that even if your interest rate never increases and even if your basic mortgage payment stays the same, your monthly payment will still fluctuate in price over time, and as the owner you have no real recourse.
  • You are now financially responsible for any and all repairs, ranging from mundane (baby crapped on the carpet) to major (the roof needs to be replaced, the plumping in the bathroom burst, and your dishwasher broke).
  • The long-term value is a myth. These days, American’s “own” their homes for an average of 6 years before selling or leaving the property and moving onward. Generally, the most effective and reliable means of advancing in your field is to transfer, whether it be to a different facility or a different company altogether. This usually requires moving. Now consider these factors in selling a house, many of which are out of your control or ability to predict 6 years down the line:
    • In the time I’ve lived in this home, have I been able to maintain/ improve the property to get my money’s worth?
    • How is the housing market? Will I be able to sell it in time?
    • Is it worth it to rent the property until I can sell it? (think of the property damage renters often cause — can you handle those costs?)
    • Can I afford rent/ mortgage at the new location and the mortgage on my old house until it sells?
    • Do my neighbor’s properties raise or lower the cost of my own? (are they well kept or overgrown and shabby? Are they lived in or abandoned?)
    • Has the city built anything nearby that will drive down my property values?
    • What will you get out of your house? Well, that all depends unexpected opportunity to advance in your position?
    • If I choose to commute, will the cost of gas mitigate any “savings” from not selling the house?
    • What about the school district/ crime level/ employment in the area?
  • No choice in who your mortgage servicer is.

That last one is possibly the one single area where American’s have no choice in where they spend their money. Think about it — do you disagree with Wal-mart’s company ethics? Target’s? Amazon’s? Do you not like the way Applebee’s servers act too friendly? Or the way Outback cooks their steaks? Well, you put your money where your mouth is. You find alternatives. The more a cause, value, or ideal means to you, the more you opt to shop at places that promote your cause, while avoiding places that don’t. We do this with everything: Our financial institutions, what restaurants we eat at, where we shop — as Americans, we’ve been taught the lesson of the almighty dollar. We have learned the power of blackballing businesses, of what a toilet-paper panic or a Black Friday sale can do.

We know that money is power, and choosing where (or if) to shop is a form of power. And that power is stripped in one area from home owners — they do not have any say in who they make their mortgage payments to. Even today, even in 2011 and after all the news coverage and hype about inflated interests rate and bad loans being sold and transferred sans deeds in massive warehouse basements, even now it still happens. In the 6 years I owned a home, my loan servicer changed 4 times. Neither myself nor my husband were ever consulted — we were informed, “On thus and such a date, you will commence making your mortgage payments to Company B. Any payments made to Company A after said date will not apply to your mortgage. Thank you, and contact Company B for further information.” The further information was always just, “Yeah, we bought your loan now. So make payments to us or else you’ll accrue late fees, go into default, and eventually be foreclosed on.” It didn’t matter if we didn’t like their policies; their late fee structure; the fees they tacked on for talking to tellers, making online payments, making over-the-phone payments; their company ethics; or, hell, if a phone representative was rude to us. You know why? Because we had no choice.

They are taking a gamble. They are gambling that American’s are more concerned with holding onto their property or maintaining their credit rating than worrying about the technical legalities of whether or not their servicer actually holds the deed (and therefore the ability to foreclose). In any other industry, at any other place, if consumers were treated the way they were by mortgage companies, they would take their money and walk the fuck away. Hell, you can do it with your bank account — but you have absolutely no say in who services your loan. And they still try to claim we “own” these properties. Ha.

Pro’s of Home Ownership

  • There’s got to be some, but I haven’t seen, heard of, or experienced any benefits that outweigh the drawbacks.

So, hows about renting? Well, sure, that’s got pro’s and con’s, too.

Cons of Renting
  • Your landlord/ neighbors might be dicks. Of course, you only signed a 6-12 month lease. If they’re that much of a dick, you can find a new place.
  • You don’t have a yard. Solution: rent a house or duplex instead of an apartment.
  • No garage. Solution: rent a house or duplex; spend the fee for a covered garage at your apartment complex; or rent a garage in town.
  • It’s harder to find places if you have pets. Harder, not impossible. I have a black lab and three cats, and I found a rental within 1 month of deciding to move.
  • You can’t paint the walls whatever color you want/ renovate/ etc. You know what? Boo fuckity hoo. Seriously. Most homeowners can’t, either, because it’s fucking expensive.

Pro’s of Renting

  • If you don’t like it, move. Don’t like your landlord? Neighbors? School district? Have things changed since you moved in? Has the neighborhood gone downhill? Who cares, you’re on a 6-12 month lease. Start packing your bags and looking for options; you’re moving.
  • Cost sharing. Depending on what type of residence you rent (apartment/ condo vs. duplex vs. house), some things like sewer, garbage pick-up, and certain utilities will be discounted due to the fact that the cost is being shared amongst all the residents.
  • Environmentally friendly(ier). Shouldn’t be too much of a surprise, but for you environmental types, renting (essentially recycling) a property is more environmentally friendly.
  • You break it, landlord fixes it. As a general rule of thumb, fixing things is the landlords domain and responsibility. Get rental insurance for your stuff, your t.v. and couch and oh-so-precious signed first edition Firefly DVD’s with the limited-edition bonus artwork or what-the-fuck-ever, but everything else is the landlords deal. There are even laws and non-profit organizations you can turn to if the landlord isn’t holding up their end of the bargain, and unlike HUD, their hands aren’t tied.
Honestly, I think so many people still want to own homes because they really haven’t thought about it; they haven’t examined the pros and cons and how it fits their lifestyle — not this faux American dream based on an idealized shared cultural history, but how it fits their actual, real lifestyle. But really? If anyone can give me a decent argument for home ownership, one that outweighs all the cons (and keep in mind, I covered the issues that bothered me the most. My husband could do a whole ‘nother post on the financial aspect and sunk cost fallacies) of modern home ownership, I would love to hear it. Then I’ll sell you my house.
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