My wife and I have started looking to possibly purchase a house. This process can be so exciting. For me? It has gotten me frustrated. I am not frustrated with the prices of homes, the quality of homes, or really anything to do with homes, however. I am frustrated with what our society has become. You see, it has become the norm to take out a loan for 5-10x your yearly income. But it gets worse. When you do the calculations you find that the home that you “bought” for $180k, you really just committed to paying $442k. Why has this become the norm? Why is it that we are so desperate to “own” a home that we sell our integrity, sell what we know is right, to get it?
But that is not the root of my frustration. My frustration is just this- we have come to the point where we value money and possessions far more than we value fellow brothers and sisters. We see the people among us hurting, desperately trying to pay their bills; losing thier homes, their cars, their jobs. And what is our encouragement to them? “It’s just the economy, it will pick up. I am praying for you, brother.” Now, I am not one to swear, but that is total BS. People, wake up! If you think for one moment that simply (and only) praying for someone is what you are called to do, then greatly deceived you are (I speak to those who have possessions, not to those who are in dire need).
To those who own a home: God has blessed you. Use what He has given you to bless others and bring Him glory. To those without a home: Do not sell your soul, your integrity to get what man says you need. For it is God alone who gives to his children what they need. Your Father hears your prayers, and he values YOU.
So we must learn. We must seek after the truth. We must know true riches are. We must desire wisdom. And until we learn to value our brothers and sisters beyond even our own welfare, then I say this to you: “What good will it be for a man if he gains the whole world, yet forfeits his soul? Or what can a man give in exchange for his soul?” Reference
by James Hansen
09 Mar 2010 at 08:03
Well put cousin! This world has indeed strayed down a path that is not ideal.
by AaronG
09 Mar 2010 at 09:06
Proverbs 24:27
“Prepare your outside work, make it fit for yourself in the field; and afterward build your house.”
Make sure you have enough saved to get you through tough times, job loss, etc… (3 to 6 months income)
Matthew 10:16
“Behold, I send you out as sheep in the midst of wolves. Therefore be wise as serpents and harmless as doves.”
Get the best rate possible, seek counsel if you are unsure.
As an example your mortgage payment should NOT be more then 35% of your monthly income.
So using your example your net income should be $42,200 per year minimum.
Personally I would like to see you put down more so you don’t have to pay the 78 months of PMI and you could probably lower your interest rate.
Proverbs 10:22
“The blessings of the Lord makes one rich, and He adds no sorrow with it.”
Proverbs 14:29
“He who is impulsive exalts folly.”
Proverbs 1:5
“A wise man will hear and increase in learning, and a man of understanding will acquire wise counsel.”
If you find this helpful you might want to attend a Dave Ramsey Financial Peace University class.
by brandon
09 Mar 2010 at 10:21
Aaron, I appreciate your response. My frustration isn’t with the interest rate (5%), but with the fact that we as a society find it so acceptable to take on so much debt as well as pay so much interest. Even at 2% (which, as far as I have seen, does not exist) you are still looking at paying $75k in interest on a $180k loan. How is that at all acceptable?
I have looked at Dave Ramsey. He looks ok, but for the most part it is common sense (or, should be). One part that I take issue with is that he councels Christians, and as a part of that he doesn’t immediately instruct them to start tithing.
Too often we say “I don’t have enough to give 10%”. Maybe you don’t have enough because you don’t give. Our God is the God that created all things. Can we really not give out thanks to Him and trust that He will take care of us?
by Troy L. Allen, Sr.
10 Mar 2010 at 07:17
Brandon,
Great post. But your comment about Dave Ramsey and tithing is incorrect. He teaches and preaches about tithing all the time. But you must understand that although he sees what he does as a financial ministry, he is not always talking to Christians.
When he does discuss tithing, he does say it is always 10% off of the top. He also teaches, unlike many others, that tithing is not giving the money to God — God does not need your money. God wants you to have a spirit of giving, and give towards his great works by man here on earth. When you show God that you are a good steward of money, he will bless you with more.
The only time I have heard Dave tell someone to TEMPORARILY stop tithing was when a single mother could not pay the rent/food/electric. I have been following Dave for over a decade, and I listen to his show everyday via podcast. He is very consistent in his teachings about tithing. If you are interested, I am sure I could find a sound clip on his website about the subject.
Regarding the actual subject of your post: Dave teaches that you should put no less than a 20% down payment on a home, and your total payment should be NO MORE than 25% of your take-home pay on a FIFTEEN YEAR mortgage.
If you do the math on that, you will be more in the range of buying a house that is 1 to 2 years annual salary (not the ridiculous 5-10x that the mortgage lenders approve people for even TODAY).
It also ensures that your home is a blessing in terms of how much you spend on it monthly. If you spend more than 25% of your take home pay, it becomes a burden.
Good luck in your hunt — and if you REALLY want to be unique, you could do the “100% Down Plan”. Because remember, ALL foreclosed homes have a MORTGAGE on them. (grin)
Best Regards,
Troy
by brandon
10 Mar 2010 at 09:46
That is just awesome, Troy. I am planning on, and have been since I was a child, to go the 100% down route.
I don’t want to make more of it that it is, but I do think that it is bad advice to tell the lady to stop tithing, even though it seems rational. You see, that is the exact moment that I would tell her to continue tithing. And at that moment every Christian that surrounds her should lift her up and to help her with her needs.