Welcome to Taking Stock, a space where we can take a deep breath and try to figure out what the COVID-19 economy really means for our finances. Every month, personal finance expert Paco de Leon will answer your most difficult, emotionally charged questions about money. This year has forced many of us to reprioritize our finances, and there’s no clear road map for getting through the pandemic yet — but Taking Stock is here to help us figure it out together.
Last time, we talked about what to do when owning a home becomes a nightmare. This week, we asked Refinery29 readers about how they could afford to become homeowners, how much it costs them, and whether they ever regret it.
Do you have a question or dilemma you’d like to see answered as part of Taking Stock? Submit it here or send us an email at email@example.com.
Madeleine, 53, California
Madeleine bought her first house in 2005. At the time, she had $20,000 in savings and an income of $150,000. Since then, she says she’s “had three others bought and sold.”
Her initial monthly payment for that first house was $2,200, and then she also spent money on maintenance and renovations. “On my current house, [I’ve spent] probably $50 to 70k on renovations, repairs, landscaping,” she says.
Homeownership has definitely been a strain on her finances, and Madeleine admits she’s fantasized about selling right now. “Once you have a mortgage, it will be the biggest expense in your budget,” she says. “It can be a great investment and help you to buy bigger and better homes, but it may keep you from affording travel or private education for your children. And it can be extremely stressful — for example, [it can] force you to stay in a job you don’t like or that isn’t healthy.”
“Owning a home has its trade-offs. If you want to live in the moment and have financial freedom, don’t strap yourself down with a home,” says Madeleine. “If you’re looking for long-term stability for your family and dream of a yard filled with fruit trees, love to entertain, enjoy renovation projects, interior decorating, and are cash-fluid, consider buying a home. Those were all factors in my decision. Like any decision, do not succumb to commercial pressures, like from realtors, or social norms. Do what’s right for you. If you decide to buy, don’t get emotional and buy more than you can afford — the pay-off will be greater in the long run.”
Nathan, 51, California
Nathan bought his home in 2017, with $50,000 in savings and a combined income of $120K with his husband. The down payment was $40K, and the initial monthly payment was $1,200. Currently, they pay $1,400.
For repairs and renos, “I’ve probably spent $20k in total — replacing all the windows, painting the house, buying appliances, putting a new insert in the fireplace, some plumbing and electrical work,” he says. “The house was built in 1963, and we had to give it some love.”
Nathan hadn’t had …read more