It is very important for your future, with the uncertainty of social security, gas prices, retirements, the value of the dollar to maximize every investment you have. Real estate is an investment we should all take advantage of. Purchasing real estate is so different from most other purchases. We all need housing so don’t make payments into someone else’s retirement account – make it into yours. Real estate does not depreciate in the same way a car does. Real estate is a necessity. But, the necessity does not mean it should be in excess.
Rather than purchasing “all you can qualify for”, how about purchasing a home just a little cheaper and putting the difference between what the payment “would have been if you bought all you could buy” and the monthly payments of a conservative investment, into paying off your loan early? Imagine adding an extra $300-400 a month to your monthly payment and a little each year from your income tax refund and having your house paid off in 15 years rather than 30?
Why would you do that? Why would you care if your house is paid off in 15 years rather than 30? It will mean a LOT in 15 years!
How can you do it? Purchase a little more conservative rather than “all you buy.” I know this is NOT what most people tell you and is NOT what most of us want. We feel we need to “keep up with the Jones” and have what everyone else has. But, do we really? Do we really have to have all that we have? Consider what our parents and grandparents “got by with” compared to what we have now.
Imagine being 50-60 years old and actually having your house paid off when you want to retire. Imagine being 40 years old when your kids are ready to go to college and rather than having a house payment AND college, you only have tuition at Texas A&M University to pay for.
Financial insecurity is a stress on your family that can be avoided most of the time. Take the money you were going to spend on a new TV or another new toy, and apply it to your house loan. Think about what you are teaching your children about fiscal responsibility and preparing for the future. It will be worth it today and tomorrow!