Real estate experts say the housing market is finally recovering, and I tend to agree. My husband and I decided to weather the storm when housing prices in our neighborhood collapsed. They finally hit bottom last year when a close friend purchased a home in my neighborhood at amazing half-off prices.
Our neighborhood has changed a lot in the past 7 years since we purchased our new construction home. We've seen people flip their new homes for a profit as well as people go into foreclosure or lose money in a short sale.
However, through it all, my husband and I decided to stay put. We know no matter where we live there will be problems and challenges. We decided to write down our own personal long-term goals as homeowners.
Committing to our house
We have seen how many people lose tens of thousands of dollars by hopping from one home to the next. They spend money on renovations, decorating, closing and moving costs. Instead of buying a step-up home we are staying in our house that cost us $183,000 at the top of the market. We now see that renting a home would not have gotten us any further ahead. In fact, the cost of rentals are so high in our neighborhood that we would have a difficult time paying rent for a home like the one we own. By staying put, we also provide our children with a stable environment and lasting childhood memories.
Paying off our mortgage
My husband and I took out a mortgage for about $150,000 when we bought our home. We put 20 percent down so that we wouldn't have to pay PMI or private mortgage insurance. Because the value of the home went down so much, we found out we would have to pay PMI if we wanted to refinance at a lower rate. Instead of worrying about a refinance, we decided to keep paying down our mortgage. We now owe just about $100,000 even on our home. We hope to have it paid off in another 8 years.
Turning it into a rental
Instead of selling our family home, we would consider renting it out to another family if we decided to relocate. Our neighborhood currently has a good mix of owner occupied homes as well as rentals. From what I can tell, it's extremely easy to rent out a home because many of the people who went into foreclosure now need a place to live.
Converting it back for retirement
When my husband and I turn 70 in another 30 years, we can convert our home back into our retirement nest. Because we own a home with no staircases, it would make a fine home for our old age. With four bedrooms, we would have plenty of guest rooms for grandchildren and other visitors. Also, we like the climate in Florida.
Some of the things we do not plan to do with our home include taking out a home equity line of credit or refinancing to a loan with a longer term. We are excited to have a 15-year mortgage with a fixed rate that will be paid off in 10 years even if we don't pay a single penny extra. We don't view our home as a real estate investment or savings account as some people do, but we like the security it gives us to have a place to call our home.
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