Why we sold our souls for A mortgage

Published April 12, 2017   Posted in Guest Posts

Those damn mortgages. They are often the largest debts we ever incur. My mortgage had a devastating affect on my financial situation at the time, and I know that I’m not alone. Today, I bring to you a post from Mrs. Picky Pincher who tells us why they sold their souls.

There I was, covered in satin-finish eggshell paint, staring at a half white and half lime green (yes, lime green) wall. I was a newly minted homeowner taking on the ambitious project of renovating a home myself.

For weeks I subsisted on sad little McDonald’s hamburgers as I threw thousands of dollars into a home I didn’t own. The bank had me by the cajones and yet I happily plugged away, absent-mindedly smearing more overpriced paint on my thrift store clothes.

It wasn’t until I was halfway through painting a lime green room that I thought, “What the f$*#* am I doing?”

We decimated our savings for a down payment and nearly worked ourselves to death during a three-month renovation. I had never seen so much money flee from my bank account at once. And there I was, working ‘til my little fingers bled, all for a home that put us on a financial detour.

“Damn, houses are expensive.”

I knew home ownership was expensive. Everyone complains about it, but I figured I could be the magical exception to the rule. I was a frugal lady and Mr. Picky Pincher was pretty handy. With our combined powers, we could reach early retirement while pumping money into a badass house.

Oh, how the mighty fall, y’all. We’re still meeting our FIRE goal, but uh, it’s been delayed. All thanks to our home.

When Mr. Picky Pincher and I got married two years ago, we had $65,000 in student loans, $25,000 in car loans, and $14,000 in credit card debt. We worked our tuckuses off to drop the credit card debt and the car loans. What remained was the behemoth student loans.

But then we got distracted by something shiny: the overwhelming desire to buy a house. Our original plan was to pay off student loans and then evaluate our living situation. But at the time, interest rates were low with whispers of rate hikes on the horizon.

Mr. Picky Pincher said, “We should buy a house.”

I said, “Dude, we should totally buy a house.”

With that intense debate settled, we funneled our efforts into building our savings. We had a nice sum of $16,000 by the time we closed on the house. $12,000 of it went to the down payment (ouch!!!) and the rest went towards our renovation.

It wasn’t until I was covered in paint (and God knows what else) that I questioned our decision. I crunched the numbers and realized how big of a detour the house was for our finances.

We could have taken our $12,000 down payment and slapped that sucker right onto our student loans. Hell, we would be completely done with student loans by now if we hadn’t bought a home. So in addition to our $65,000 student debt, we now had a $145,000 mortgage to eliminate.

I don’t want debt of any type during retirement, including a mortgage, so we now had to scrape together $145k.

I guess that’s not a huge number if you, I don’t know, are a cocaine dealer. But for an honest Joe and Jane, a mortgage was no small matter. I left Mr. Picky Pincher, our resident Math and Spreadsheet Wizard, to figure out how we could still meet our FIRE goals.

We would be okay, but it meant saving and investing less money as we paid off the mortgage. Ugh.

Now that we’re at the end of the renovation tunnel and paying off our crappy student loans, I don’t regret buying a home. Although we tripled our debt load, I don’t regret selling my soul (and early retirement date) to buy a house.

Why we got a stupid mortgage

Sometimes it’s not about the money.

It made no sense to buy a house on paper. The numbers screamed back at us, “What the hell are you doing?!”

But still we persisted.

Paint me naïve, but I wanted a piece of the American Dream. Picket fences are tacky, but I did daydream about baking apple pies in a big kitchen while my kiddos wailed on each other in the front yard. Ahhh, what a dream.

It’s important to Mr. Picky Pincher and I to own a home and make something out of it. We wanted to come home and say, “Why yes, this is mine. Everything in it is mine. MINE.”

So yeah, maybe it was a silly and selfish decision, but the idea of owning a home of our own was so appealing. We wanted stability to grow our family in a nice-ish area, and that’s what we got.

And yes, I’ve gained at least ten pounds from all the pies I’ve baked in my new kitchen.

I hated renting

I’m an 80-year-old woman on the inside. I’m cranky. Apartment life was a no-go for me.

Greedy landlords and lead-footed upstairs neighbors drove me batty. I never wanted to give my money to a landlord or (politely) scream at a neighbor ever again.

House rentals were an option to consider, but our city has an incredibly competitive house rental market. I had two coworkers vying for the same rental house and it got ugly. They put salt in each other’s coffee and Saran-wrapped each other’s desks. It was amusing, but it wasn’t something I wanted to experience myself.

The housing market wasn’t as competitive with the rental market, so buying meant less bloodletting.

Gettin’ dirty

Mr. Picky Pincher and I have green thumbs that extend all the way to our elbows. We’re not happy if we don’t have dirt under our fingernails.

There are limits to how much gardening and building you can do when you rent. If you’re in an apartment, you’re trapped on a sad little balcony with potted plants. Every apartment balcony we’ve ever had faced north, which meant our crops always mildewed and died slowly. RIP, basil plants.

We could have gotten away with a small garden at a rental house. But Mr. Picky Pincher doesn’t believe in ‘small.’ Our current backyard has been transformed into a man cave / agricultural retreat. He would have been devastated to have a backyard he couldn’t tame into submission.

We just set up raised bed planters in our yard and I can’t even describe the sense of satisfaction that comes from harvesting one lone strawberry. Killing slugs is also great stress relief.

We need to be outside and we need to build things, and that freedom doesn’t always come with renting. Our home gives us the space for money-saving projects. Whether it’s gardening or setting our backyard on fire with a smoker, we enjoy the freedom.

The Bottom Line

Although buying a house might not have been the best idea financially, it was still the right move for our happiness.

Sure, we’re now paying a mortgage in addition to our student loans (and sobbing over those high balances), but it’s worth owning a home. I love that people are able to make alternative living arrangements, like Steve’s badass Airstream, but we went traditional. It’s all about doing what’s best for your future goals. Finances are important, but they don’t trump everything.

We want to know: Did you also sell your soul to the bank?

Mrs. Picky Pincher is the blogger and money-saving maven at www.PickyPinchers.com. She writes about living the good life while paying off ugly debt.

We track our net worth using Personal Capital



Comments

31 responses to “Why we sold our souls for A mortgage”

  1. When I bought my house at 23 I definitely didn’t know what I was trading. I traded away travel in my 20s along with having some carefree moments. In hindsight it was the right move as it allowed my wife to become a stay at home mom when we paid off our mortgage. But the mortgage was definitely to handle in my 20s.

  2. Matt @ Optimize Your Life says:

    Thank you for sharing your story! I am very much in your camp. I intend to buy a house one day, but I fully recognize that it is not the optimized financial decision. It seems like it is only acceptable to be in the “A house is always a good investment!” camp or the “renting for life is the only reasonable decision!” camp. Glad to see that there is someone else out there who disagrees with both!

    • Exactly! My thoughts are that it depends on your finances and where you live. Good luck on your house search. 🙂 It was tough but now that it’s all said and done, I’m really glad we did it.

  3. We’re definitely happy to be home owners even if we’ve so far broken even on our current home (which means we’ve lost the opportunity cost of investing that money). Ours are many of the things you’ve listed. We have a veritable orchard and garden in our backyard. I would have apple trees, peach trees, blue berry bushes, and raspberry bushes in an apartment for example. To go with that rare is the apartment where I wake up to deer and fox cavorting in my backyard. House living is the right thing for me. The only question I wonder, now ten years in as a home owner, could I rent a single family home and have the same experience for less. One of my neighbors houses is rented. I’m not sure but it makes me wonder.

    • Oooh! Your home sounds like a Disney fairy tale. 🙂 I do wonder, too, if you can get the same experience renting. I guess you could, but it would be dependent on your landlord and location.

  4. Owning a house is expensive. But when it’s a family (or individual) priority and can be afforded – it can be a great thing.

    What many people don’t realize are the costs associated beyond the mortgage. We paid off our house in 2014 and it’s still expensive. Almost $10,000 each year still with no mortgage payment. 😐

    • Agreed! People warned me about the maintenance costs but I was like, “Psh, I’m a damn queen. It can’t be that bad!” Aha. Yes, it can be that bad. I’m really glad we got a home warranty because it’s saved us $700 so far.

  5. I’ve sold my soul to the bank but believe it has been a good decision. I have 2 roommates paying me rent, so financially speaking, it’s been a great deal.

    On the flip side of things, I do wish for some flexibility in my housing. Right now I’m debating if I should move out and buy another place, buy a condo, or rent. Then I would rent my entire house.

    Do people move out of their primary house, rent it out, and then rent? Is this logical? Maybe I’ll do a post on it! 🙂

    • Oooh, it sounds like you’re quite enterprising with your living situation! I don’t think it’s a bad idea to rent out your home. I know plenty of people who buy primary residence and rent it out after a few years. If you have the cash on hand, I don’t see why not. 🙂

  6. Arrgo says:

    I lived in an apartment complex for about 5 years. It was ok for what it was, but the floors were thin and you didnt have as much privacy as you thought. Its like you were really living with someone else right there with you at times. Plus other things that went on outside etc. People can really be annoying. I really value my own space and privacy. Its worth the extra money to me to own my own house.

    • UGH, preach! I’ve had some downright terrible neighbors. In an apartment it’s hard to get peace and quiet even if you have respectable neighbors, too. The neighbors at our house are kind of annoying, but I can just go inside and ignore them, so that’s nice. 🙂

  7. DadsDollarsDebts says:

    Ahhhh….I hear you Mrs. Pick Pincher. I feel the same way. I moved to Cali, sold my old house, and felt free. It was time to tackle those student loans…but then…after 6 months of apartment living I was ready to scream. We looked at renting a house, but because we own a dog our options were limited. So then came the bright idea of buying a home again.

    We did it. We blew a ton of savings in the down payment. We blew even more money in fixing broken things (sump pump, electrical outlets, lights, and last week a roof leak!). Then there was the gardening- we planted 14 fruit trees and filled up our garden boxes with soil (surprisingly soil can be expensive). Now I am hoping the hemorrhage of cash stops so I can enjoy the house.

    I also often imagine moving into a smaller home and not having to deal with as much of the pain of owning a larger home. We probably have 2 rooms we don’t need and unless we have a second kid, won’t ever need. Alas, only time will tell. For now I am going to sit tight for at least 2 to 5 years and then reassess. Maybe the market will boom or maybe it will bust…

    Thanks for sharing your thoughts with us!

    • katrun27 says:

      So many good points here! I think for you guys the home-buying makes sense. Your reasoning seems sound to me, especially since you’re aggressively paying off student loans!

      I hope we’ll be able to buy a house when we move; it’s so hard to imagine going back to apartment living/renting after having a house for eight years. A garden would be great, as well as some yard space for the munchkins 😀. It’s so much fun dreaming of our next home and how it will (we hope), not have the weird issues we have with our current home!

    • 14 fruit trees? That’s amazing! Sounds like your kiddos will have lots of trees to climb. 😉 But man, I agree, I hate apartment living, even at the best apartment complexes. It’s right for some people, but sometimes you just need to drop all of your money for some privacy lol.

  8. I now live in a tiny paid in full condotel, but I did have houses. I have to say that I do miss having a backyard, but I DON’T miss the maintenance and cleaning. 🙂

    I am like you. I really despise renting from someone and I don’t want to have to drive around any vehicle (I’m car free), so this situation suits me well.

    I agree though, it is all about happiness and we are all different in that respect!

    • That’s so neat! I know the condotels are becoming a lot more popular. Are all of the maintenance fees included? I’m tempted, but I’m antisocial and hate living around so many people.

  9. Brittany says:

    Thanks for sharing your story! I loved reading it. When we bought our house we paid $145,500 so we are right there with you. We made the choice to buy where we did so our kids could get into a great school district. Thankfully because of the district we are in, house prices have risen and I believe ours is now worth quite a bit more than our mortgage on it.

    I am like you in the sense that I love gardening. Right now, we have three 4 x 8 foot raised beds in our backyard. But, I would love to turn our entire backyard into a mini farm.

    I do think about all of the time how we have a huge balance to pay off on our mortgage. Currently, I work remotely, but my husband doesn’t. But, if we were able to both make an income being location independent, then I think I could change my love for home ownership and give it all up to travel.

  10. Jax says:

    I am also an 80 year old woman at heart. I don’t want anyone living above me, and I have too much furniture to live on a second floor. I don’t want to fight over parking spaces or argue about noise. I lived in a pretty good apartment, and the house Mr. Beach Life and I rented was definitely livable, but I really enjoy owning our house.

    However, we live in a weird market where our mortgage is less than what our rent was, and we can rent our house out for twice the mortgage if we ever need or want to. Plus, the basement we rent on Airbnb.

    Even though you took on more debt, it sounds like it pales in comparison to your happiness in the house (minus the renovation. That is soul sucking, even if it is temporary.)

  11. Mr. Tako says:

    Yeah, houses are really expensive, I have to agree!

    We waited a looong time until we bought our house. We paid off our student loans, and car loans and then saved for years. In the end, we could have bought the house with cash but ultimately decided a mortgage was a smarter idea. We left the money invested instead.

    Getting ahead of the debt and building some assets that start working for you is going to be a huge win.

  12. Luckily I didn’t get a mortgage when I purchased my place. But here in Sydney, the property market is red hot! I don’t see how most people in their 20s can afford a house when 1 bedroom apartments go for $500k

  13. jasonedwards57 says:

    We were totally in the same position, except we had much more student loan debt (my wife’s). Now we are slogging through a mortgage and student loan debt at the same time. That said, I do think it was the right thing to do. It increased our savings rate. We have a “home” although it is not our forever home. I think of it as forced savings so that one day, when/if we decide to leave this part of the country, we can buy a home in our ideal location either free and clear or pretty damn close to being it. Until then, one renovation project at the time. In fact, as I write this one project is being completed down the basement (there goes $3000).

  14. Joe says:

    I hated renting too. I much prefer to own. We got a mortgage and that’s okay. We know we could pay it off if we really need to. The rate is low and it’s fine for now. Sounds like you like living in your own home.That’s great!

  15. CiCi says:

    cajones = drawers
    cojones = courage, “balls” (testicles), chutzpah

  16. financeswithpurpose says:

    We’re considering it right now. I talked about it in our financial update, but it’s something we want feedback about. For us, it’s a way to limit the ever-inflating house prices here (which are rising well above normal house-price inflation) so that our housing expenses don’t continue increasing year after year after year. That’s our main goal. We like ownership, too, for many of the same reasons, but what puts us over the edge are the ever-increasing rental rates and home prices.

  17. Carrie says:

    At 23 and 25 we bought our first house. We were very low income but wanted a house. We went right to the limit of what they would lend us. Those first few years were very tough and, at times, I thought we were in over our head. After 5 years we were able to sell for a nice profit and buy our current home. We were careful not to go right to our limit this time. We also put 25% down to avoid mortgage insurance fees. We paid the house off last year and now put the mortgage amount towards extra savings.
    Our goal was to always get the mortgage paid off. But I see friends and family who don’t plan on ever paying their house off. They use the equity in their home as a cash source or upgrade to a higher priced home again and again. That is really selling your soul to the bank.

  18. 5 years ago we began paying off our student loans. About 7 months into it we decided to start taking the money we were putting towards debt and started a fund for a house down payment since we still felt a lot of pressure to buy a home. We ended up deciding to not buy a house since we still had $90K in student loans and knew there would be lots of extra expenses. We took the money we saved (about $19K and applied that towards the debt and were done 2 years later.

    After we saved up a 3-6 month emergency fund we then started saving for a house again and purchased one last September with a nice chunk of money still left over. We are so happy that we focused on one goal at a time but I got so sick of hearing about how interest rates were going to go up. People said that for years and still do. They also always had a reason for why we should buy a house and they never really seemed to care if were in debt.

    I’m very happy with our purchase but it is a lot of work and now that we have a mortgage at about $235K it will be interesting to see how we balance our goals of saving a lot and not having a mortgage. My wife will also be quitting her job in 2 weeks to stay home so things will be tight for a while.

    Home ownership isn’t for everyone but there are enough financially successful people to see that there are many roads towards financial freedom and independence and you guys are doing just fine.

  19. Daniel says:

    I bought my first place at the ripe age of 25. Nice part of it was that I immediately turned around and rented 2 of the rooms, which more than covered my mortgage….
    If you are going to be in an area for a while, find something that you like, then then you might as well own something as long as the numbers work out. The current tax climate still favors home ownership and even though it is your most non-liquid (even with a HELOC), lowest performing (historically) asset in your portfolio, it is nice to own your own property. I know in my case there would be no way to rent a place at the price I am paying for my mortgage (in particular if you subtract the principal from the payment, and then factor in the tax advantage).

  20. Amanda says:

    If rental options in my city (Columbus, Ohio) were more attractive and affordable, I would have gone that route. But, like you say about gardens…it’s nice to have more space. In my case, it was nice to have a home for my dogs – no giant deposits and extra monthly fees, no negotiating with the landlords or living in a substandard space because I have two dogs. They’re well-behaved, well-trained dogs, but that does not matter to most landlords. They’ll allow smoking in rentals in this city before they allow dogs. So, I sold my soul for a mortgage, too. It’s not my dream house, but it’s nice. It’s on a nice lot in a nice neighborhood. It’s got nice light and nice floors. It’s the right size for me and my boys. I don’t know how I can pay it off AND save for FIRE, but I’m crunching numbers now.

  21. We are in the process of it! We hate renting. The house delays our plans but we can still retire over 15 years early if all goes decently.

    Too often people view the decision to buy or rent as just about the numbers. It’s a home, not a math problem. Sometimes we make decisions based on things that can’t be expressed monetarily and that is fine.

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