In reality, many people were already overextending themselves when buying their homes before the ARMS’s and 40+ year mortgages. Being in the construction industry, my husband has been working in large homes for 20+ years and has always talked about how so many of these houses were still almost “empty” even after the owners had lived there for several years. Their mortgages were so expensive, they couldn’t afford furniture, curtains, etc.

Real estate agents and lenders definitely share part of the blame. When we bought our home 16 years ago, the agent and lender tried to get us to buy a house at our max approved loan amount, but we had determined our own upper limit and wouldn’t consider anything more expensive. We’ve never regretted that and never had to worry about losing our home even when money was tight and when we lived on one income while our child was young. Our home will be paid off many years early, and we have saved tens of thousands of dollars in interest. The peace of mind has been worth way more than a bigger house!

Thanks for your great blog! I am a regular reader and enjoy your practical advice. I hope everyone buying a home follows your advice!

When we purchased our previous home, the mortgage broker kept insisting that we could aford almost 3 times as much for a home. Even after we explained that we were unwilling to stop tithing or lower our retirment savings. We finally just told her that this was the house we wanted and if she didn’t want to give us that small a mortgage, we’d go somewhere else.

During the big boom, there was a lot of pressure on the mortgage folks to push higher loans to get higher returns for the company. Combine that with the realtor’s desire for a larger commission and the general marketing that we’ve got to have more and newer and better and you end up with … well, today.

My last mortgage (including tax and ins) was $515 on the 3/2 manufactured home. At the time I bought that house I was paying $500 for rent, so it made sense to buy.

Now our minimum rents are about $700 up to $1400. And the housing prices (this year- they were high and out of reason last year but have dropped drastically now) have dropped back down to the same range. That’s the good news – unfortunately the wages here tend to be very low also.

My reason for buying had more to do with retirement – I don’t want to be paying mortgage nor rent when I retire, altho I’ll be paying about $150/mo for taxes and insurance.

Good luck :)

You can find a 3 bedroom house for rent for around $1000. Or you can rent a duplex, like we do, and pay less than $700, and that includes water, which is expensive in our town.

It is difficult the be a renter in a land of owners, and I can’t say that I never have the desire to just buy. But a mortgage right now would be well over what we can afford.

It’s very difficult to be a renter in a land of owners, also having a paid for house is the corner stone of most peoples retirement plans. although many seniors are asset rich and cash flow poor.

The problem that I have is the author seems to look at wealthy people as evil, just because they have money. Wealthy people are not evil, nor do they owe the rest of us, just because they happen to have a lot of money.

And though most people will not become multi-billionaires, we do live in a country where it is possible to move up the income ladder with a lot of determination. If Chris Gardner (The Pursuit of Happyness) can do it, it’s certainly possible for the rest of us. I know he’s had to endure more hardship than I ever have!

Best advice ever!