Trying to follow

We plan on paying off our mortgage in no more then five years (possibly a little more if you include school loans). This is not something that is encouraged or supported in our debt-driven culture. Even with hundred’s of debt relief books and websites out there, I’ve rarely, if ever, heard encouragement to pay off your mortgage as quickly as possible. People always seem to speak of a house as an ‘investment’ and ‘equity,’ rather then acknowledging that it is also debt.

We’ve decided to purchase a home and we’ve decided to be diligent in paying off our mortgage for that home as quickly as possible. Here are some of the reasons.

• We don’t want to have any debt. For many, taking a loan is a necessary evil to purchase a home (and go to college), but that doesn’t mean we should accept it as good. We plan on paying off our home quickly, because until we do we will be paying interest to the bank and we will have tied much of our income into our loan.
•  We want to serve as an example of fiscal responsibility. With so few examples and encouragement to pay off your mortgage, I think few people think it’s important or even worthwhile.  I think incredible good could be done with the financial resources we would have available if we did not need to constantly use our income to pay the interest on a house payment.
• On the practical side of things, purchasing a home now will help us invest our ’shelter’ money into paying off a mortgage, rather than paying for rent somewhere. We considered saving up the money for a home first, but realized that it might be wiser at this stage to take a loan and pay it off quickly than saving up to pay cash.

Again, this is just a few of the reasons. The goal was to address the financial and ‘mortgage’ side of things and try and explain how what we are choosing does not necessarily fit the ‘traditional’ way of home ownership.

This is also the stage where I would really really appreciate some feedback. Those who own homes might have insight’s I haven’t considered. Those who don’t are in a good place to challenge me on some of what I’ve shared. I think a deeper dialog on this topic would be really valuable. What are your thoughts?

part 1

part 2

I think I might dub Tuesdays, ‘YouTubesdays,’ and post a video I’ve found interesting in the recent weeks. Today, I wanted to post some informational video about the current housing market. I couldn’t find anything more engaging and still informative then a basic interview, but I think you might find it interesting.I won’t really get into it here, but this current time period is one of the reason’s we think now is a good time to purchase a home.

Sometime in the next couple months my wife and I will likely purchase our first home. As a friend of a friend said concerning that and my values which I clearly convey on here about money and community, she said:

“Isn’t that Hypocritical?”

The honest truth is, it might be. For the next few days though, I want to try and articulate some of what has gone into the decision and where we hope to go in the future. In hopes that even friends of friends will continue to hold me to the values I acknowledge and convictions I have.

In our current culture, I think it’s probably important to start with why I have not bought a house before I even begin to discuss our decision to buy. I’m not sure how many reasons I’ll list so I’ll just use some bullet points.

• Debt is a Bad Thing. In our consumer driven, credit-card swiping society, I think this statement is becoming more and more uncommon. As the value of your almighty ‘credit score’ increases people are becoming more and more convinced that debt is good (not ridiculous debt of course, but where do you draw the line?). In my journey of questioning our culture and continually checking my faith to Scripture rather then society I feel the statement above is quite obvious.
  [sidenote: Did you know the quote, "The borrower is slave to the lender" is actually by Benjamin Franklin? (update: actually proverbs 22:7 is pretty close)]
• Renting Makes Sense. People tend to talk about buying a house like it’s a no-brainer and that renting is ‘throwing away your money.’ First of all, buying a house causes you to ‘throw away’ money on closing cost, interest, mortgage insurance, taxes, and more. In the same way that insurance can sometimes make sense because it transfers the risk to the insurance company for a small fee, renting put’s the risk of house problems and cost into the hands of your landlord (Which has been a might good idea in my opinion).
  
• A House is a part of the ‘American Dream.’ And, as you know, I’m quite skeptical of the U.S.A. Dream. I do know too many young people who have stepped into home ownership, with the support of friends and family and church members, and gotten in way over their heads. That dream forced them into jobs and hours they didn’t want, projects and expenses they hadn’t planned on, and ultimately consumed much of their lives.
  
• Home Ownership is available to the privileged. Many in the world do not have the resources to own a home, why should I? Why participate in a profit driven, redlining discrimination, capitalist market, that only some can afford to be a part of?

I think there are more reasons but we’ll leave it at that. Here’s the honest, but possibly hypocritical part of this. I think at this stage buying a home is the wisest decision for my family and for building community, but I recognize that it’s entirely possible I’m twisting my values to justify my selfish behavior (I don’t think I am, but I recognize I’m not a purely righteous person). Therefore, I leave it up to you, friends and readers, to challenge me, converse with me, and help me think through this decision while keeping with my values and trying to follow.

My short blogging break has left me with a lot more links, info and material then I have energy or space to blog about. So, I’ll leave you with some links that I encourage you to follow. I’ll probably start doing this once a week or so just to pass on some worthwhile material for you to check out if your bored on a weekend.

• I know I’ve mentioned De-motorize your soul, but here are some folks who are actually doing it. Drew, Josh, Odom’s, Jessica, and Jeff.
• Nick pointed out this great comic strip.
• Baby Einstein isn’t so smart now is he?
• Mark pointed out this engaging advice column.
• If you care about politics at all check out Sunlight.
• Keane sent me this article on Home-Ownership.

That’s all for now. Enjoy your Saturday.

A while ago I picked up the book Rich Dad, Poor Dad. It got me thinking and one of the big things I had a dilemma with, particularly as it relates to real estate, are these thoughts below:

When I think only about the financial side of the real estate business, it’s quite tempting to try and jump in. And that’s when I step back and think about some of the social implications.
I’ll start with a typical example. Pick up your average ‘Make millions in Real Estate’ book and one of it’s tips will be to go to the bankruptcy office, or look for foreclosure notices, those are places to get houses for dirt cheap. Never have I seen in ANY book or tape or information anything that addresses the needs or situation of the person that is bankrupt or foreclosing. If anything it might mention that they’ll be glad to have the money, but I highly doubt they are glad to lose their house. “Your misfortune is my fortune,” that’s basically what it is, and that just doesn’t sound right to me.
The other major problem with real estate that I see is the power it has to push people around, particularly poor people. Gentrification is somewhat of a buzzword, but it’s happening and it’s frustrating and sad. Pick any major city and what’s happening is people with low incomes, but people who had a stable home, are being pushed out of their residence and left to move somewhere else. Now that the city has become popular again, those with money are forcing (I’ll explain in another post) out those without money. This includes housing projects (Cabrini Green of Chicago is now condos). This troubles me.

It didn’t get many comments then, but maybe someone could chime in now…