I’ll change my mind.
My husband and I did more research and decided building a house wasn’t the best option for us. The biggest factors:
1) We don’t know local subcontractors. In San Diego, my husband had a good group of reliable subs he could use. In Fort Worth, we don’t know anyone. We haven’t built those important relationships yet and that could result in big delays, bad workmanship, higher costs… or all three.
2) The supply chain is a mess. Materials for a rehab will be hard to find. Materials for a complete build would be harder.
Where do we go from here? We bounced the idea of buying in an upper middle-class neighborhood. Our loan would be $100K-$200K. We could easily pay it off in 15 years. We DESERVE a nice house. We’ve had 6 people in 1,200 sq ft. We owe it to ourselves to finally have a home we can be proud of, right?
We started driving around. We discovered great little pockets of houses. Friendly neighbors waving as we drove by. Our house in San Diego wasn’t nice, but I loved it anyway. We need one more bedroom. That’s it.
So we’re looking for a house we can pay cash for. Sure, it’s not going to be as nice as I imagined. I won’t have my dream kitchen (yet) but it will be OURS. Our goal is to be completely debt free…house and all. Yes, one day I’ll get the house I deserve…when I can afford it.
BTW – Sorry for all the housing posts. It’s been such a rollercoaster of decisions and always top of mind.
Beks is a full-time government employee who enjoys blogging late into the night after her four kids have gone to sleep. She’s been married to Chris, her college sweetheart, for 15 years. In 2017, after 3 long years working the Dave Ramsey Baby Steps, they paid off more than $70K and became debt free. When she’s not working or blogging, she’s exploring the great outdoors.
I’ve said it before and I’ll say it again. Interest rates on mortgages are extremely low right now. It would be foolish to buy a house in cash instead of investing the extra cash in the market. Even more so if you’re not already maxing out your tax advantaged accounts. I know you’re big on Dave Ramsey and he advocates paying off your house early. But really that’s outdated advice for beginners and people that can’t control their spending/money.
You can save 3% (or 2.25% for 15 year) a year on your mortgage with your 100-200k with the effective interest “saved” decreasing every year. Or you could earn 7%+ per year compounding gains on it. As long as you aren’t inflating your budget elsewhere with the extra money (which you wouldn’t because it’s a lump sum) it’s a no brainer in my book.
100% agree with you. Paying cash isn’t the best move financially. BUT, I’ll sleep better at night when I don’t own anyone anything. ; )
You have to do you. I wouldn’t remortgage our paid for house for a 0.5% loan interest rate. Its MINE and I’m not ever owing money on anything again. Angie is of course correct about the math, but if you are like me math is only one part of the decision. We are still in our starter home 42 years later, raised three kids in it. We added on as our family grew but it was never a fancy house. Many of the people who worked for me had more expensive homes, but we aren’t fancy people and we have done just fine in it. Lots of wonderful memories.