Your House is Worth What?

Sorry, I had to title this with a play on words from one of the more popular (and my personal favorite) HGTV shows that shows people what their hard worked houses are worth, because it only seemed logical. I wanted to talk a little about what I feel has gotten so many Americans in such hot water these days when it comes to their personal finances, and one of the biggest reasons I feel is that people have forgotten what it means to live below their means and save more money so that they can look forward to a stress free retirement in the golden years.

I think that one reason for people living above their means is that they put too much that they have into their homes, or they get themselves in over their heads from the get go (hence the current subprime mortgage crisis, thanks to some unscrupulous lenders and repackagers of these loan risks) when it comes to a mortgage they can afford, and truly afford, on an ongoing basis, no matter what happens to their personal financial situation.

When we went to purchase our home about a year and half ago, we were able to not put anything down on our home, but apparently that has changed and many lenders are demanding a down payment of at least that 20%. We were able to get a second mortgage to pay for our downpayment because we had other plans for the thousands of dollars we had saved originally for the downpayment. And when we sat down with loan officers, we realized that for our personal situation, even a $30,000 downpayment would have barely made a dent in our monthly house payments, which was one of our major concerns.

People are trying too hard to keep up with the Joneses these days it seems. Square footage has taken over, and people are going really large for homes that they don’t even really need the space for, and it’s showing in the fact that many people are feeling the squeeze even more from the gas prices and high cost of foods, products and energy, because their mortgage is simply too high. So, what is your house worth? Are you ok with not adding on crazy additions and upgrades, and instead saving that money for your future?

If so, you’ve really got a good head on your shoulders, and you realize that the mac daddy of houses isn’t the thing that defines you, and that in the end you will live a more stress free, happier life because of that. Below the means, that’s something that has truly been lost on most people, if we could just get back to that mentality, we wouldn’t want for so much.