How Buying a Home Freed Up My Life
I live in a ski resort town in California’s Sierra Nevada mountain range. It’s just minutes from Lake Tahoe, with multiple gated neighborhoods full of second and third homes owned by part-time residents from nearby San Francisco. There’s a shortage of affordable rentals and the vast majority of empty homes are managed by vacation rental services or listed on Airbnb. There are very few apartment buildings, and the only one-bedroom units are almost always in-law units or guest rooms over garages.
What this means is that there’s a significant shortage of housing for people who live here. And, because supply and demand is very much a thing, it’s quite expensive to rent; a three-bedroom townhouse priced under $2,100 a month is considered a very good deal. While that may not seem as expensive as many major U.S. cities, $700 a month per bedroom (plus several hundred a month in utilities) can be preventatively expensive for the majority of the town’s residents — many of whom work in the service industry, where wages start at $10.50 an hour.
You don’t need me to tell you that being a renter in an expensive area of the country is a stressful experience. Still, buying a home — even if you have the funds for a down payment — can seem like an overwhelming commitment.
But consider this: it can also sometimes provide the stability you need to take risks in other areas of your life. Six months after buying my first home, I quit my 9-to-5 corporate marketing job and made the jump into freelance writing. I would have never been able to make that career leap if I hadn’t first made the leap into homeownership.
So, if the reason you’ve put off buying is the fear of being locked into something a little too permanent, here are a few ways in which buying a house may actually give you a little more freedom.
Your monthly payments go down
Prior to buying a house, my boyfriend and I were paying anywhere from $900 to $1,300 each (plus utilities) every month in rent. Now, my half of the monthly mortgage is less than my rent was, and those payments go towards paying off a house, not straight into someone else’s bank account. Realtor.com has a great calculator to help you determine if buying or renting is the better long-term option, and at what point buying will become cheaper than renting. The calculator assumes you already have the funds for a down payment, which it includes when determining the point at which you’ll break even on buying vs. renting.
Because I co-own my home with a long-term partner, I split the mortgage and am fortunately not carrying the whole cost myself. However, single people in areas less expensive than northern California may find that they can actually afford a home on their own sooner than they thought, especially with the variety of home buyer assistance programs available in the United States. The median cost for a first-time home is $182,500, and with the right assistance program you might only need to put 3.5 percent down, or $6,387.
It eliminates the need for a salary
I’m not saying buying a house means you’re removed from needing an income, but it does mean you don’t need a salary, which opens the door to self-employment or career change. Where I live, it’s not unusual for landlords to receive a dozen applications for any affordable rental home the same day it becomes available. Not surprisingly, this allows landlords to be picky in choosing their tenants, nearly always choosing a renter with proof of consistent income. Having to provide years of income statements to be approved on a rental is very common. The fight for affordable rentals is cutthroat, and the most ideal potential tenants — almost always the full-time 9-to-5’ers — will be at the top of the pile.
Now that I’m my own landlord, there’s no one demanding two years worth of paystubs. That allowed me to turn in my resignation and feel more comfortable with having a less stable monthly income.
No one cares about your income after you buy
Coming up with a down payment is tough, especially for young people burned by stagnant salaries and student loans. Even once you have your down payment set aside, you’ll still need to qualify for a loan from a major bank — and for that, you need a stable salary; banks don’t want to lend money to customers unless they feel confident that person can pay it back on time. To qualify for a loan, you’ll need to provide at least two or three years’ worth of documents proving a steady income, in addition to stacks of other forms. Both my boyfriend and I had to show years of steady, professional salaries, and prove that our combined bank accounts had enough money for the down payment. If you’re taking advantage of home-buying programs, you’ll want to show that you’re approved and part of the assistance program before starting the buying process.
But if you’re able to purchase a home, your lender isn’t going to care about your income after you’ve been handed over the keys. As long as you make your payments, they couldn’t care less where the money is coming from — which means you’ve got a lot more freedom in terms of how you make a living.
No more moving
Once you own a house, you don’t have to plan to pack up your belongings in 12 months when your landlord decides to raise the rent. Interestingly, that provides both stability and freedom: because you have a permanent home, the stresses associated with frequent relocation are gone. Plus, you’ll have the freedom to personalize your space, or the freedom to create a (tax deductible!) home office, which can provide motivation if you work from home full-time. Buying gives complete creative control over your space. It also frees up a small chunk of change, since you can say goodbye to moving costs. Forget the movers, boxes, U-Hauls and packing supplies — once you own a house, your stuff is staying put.
Your house provides back-up income
If my freelancing work were to suddenly dry up, I have a straightforward way to make reliable money every month: I can rent out rooms in my home. As a renter, you’re often contractually prevented from renting out rooms or subletting any space without your landlord’s approval and involvement. Now, those rules are up to me; if I need to supplement my income, I can rent out a room or rooms in my house. As I co-own my home, adding an additional roommate means we’ll have three people in the house, and many people would agree that fewer roommates are better — but in a town where a master bedroom with en suite bath rents out for $1,000 a month, it’s a quick way for us to cover our monthly mortgage costs.
It may make travel easier
To some people, freedom is more than being able to change jobs or personalize your living space; it means being able to backpack in other parts of the world or couch surf for months on end. Good news: you’re not sacrificing that mobility by buying a home. If you’re planning on traveling for a month or longer, you can sublet your house while you’re gone and likely cover most of your mortgage fees. Being able to travel without worrying about your housing costs? That’s freedom.
There’s nothing easy about buying a home. From coming up with the down payment to finding the right home to negotiating an offer, it’s a laborious and stressful process, even if you have a co-buyer to share the risk, like I did. Overcoming the financial challenges can be a herculean task; fear of commitment and permanence isn’t the only reason people aren’t buying homes. But if you’re currently straddling the homeowner fence, wondering if the purchase will tie you down — to a job, a location, or a career — know that moving into your own home may end up bringing you a little more freedom than you think.
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