An Alternative View of Your Mortgage

When I look at my assets these days — and it’s a quick look, trust me, I think I can look directly at the sun longer — I don’t even consider the value of my home.

Why not? Because I don’t even see it as part of my investment mix. Sure, when I sell, I hope I see a gain. But when I bought the home a couple years ago (yep, I nailed the top of the market, please keep your comments to yourself….) I looked at it as a pure financial decision: over the course of 10 years, even if we lost money on the house, would we pay more in rent, or pay more for the mortgage?

Unless I’m forced to load up the jalopy and head out West ‘Grapes of Wrath’ style, I think the answer is that I’d pay more in rent.

The thing is, I’m just not good at timing the market. Even with stocks, I buy high, sell low. That’s why I put my investing on auto-pilot and make regular investments, and do the same with selling positions that run a little hot.

I try to have the same clear-eyed view when considering housing. I knew the market was overheated and likely to come down, but I didn’t know when. And with a new Johnson on the way, I knew I needed more space. Going from a one-bedroom to a two-bedroom in New York is shockingly expensive, and doing the math, buying instead of renting made more sense (as did moving to the suburbs from the City).

So when I hear the debate about whether now’s a good time to buy a house, I think the same thing:

If you can afford it, preferrably keeping real estate costs to less than 30% of your take-home pay (yes, take-home).


If you would pay less on housing costs over 10 years than you would pay in rent,

Then buying a home might be for you.

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