It represents a significant portion of my take-home pay, yet it’s a bill I couldn’t be happier to pay.
It’s my mortgage payment. My first.
I’m happy to pay it because I realize a lot of people can’t make their mortgage payments these days. I’m happy to pay it because it will relieve the tax burden BMNB and I face as DINKs. I’m happy to pay it because I love my house and my neighborhood.
If I had known I was going to love making a mortgage payment this much, I wouldn’t have waited until I was 45 years old to buy a house.
And so, this is my message to all the women who read my blog: Don’t wait until you are married to buy a house. And definitely don’t wait until you’re 45. Ideally, don’t wait past 30.
In the intervening years since I graduated law school, I’ve missed out on the wealth accumulation that appreciated home equity means. Even despite the last couple of wacky real estate market years, home ownership, although not a bullet-proof method of wealth acquisition, is a substantial one over the long haul
. The mortgage interest tax deduction is one that shouldn’t be overlooked, especially if you are a high wage earner.
I think of a classmate of mine who bought a house in Oakland as a single woman in the early ‘90s. Even with the recent market declines, the equity she’s probably accumulated over the last 15 or more years has to count for something, especially in the Bay Area real estate market.
While she was buying a house, I was making excuses: “I can’t afford a house by myself;” “I want to wait until I know for certain where I will be long term;” “I want to wait until I’m married so we’ll have two incomes going toward a mortgage.”
First, for starters, you buy what you can afford. I may not have been able to afford a house in Oakland at the time, but I probably could have afforded a condo in San Leandro. Hey, some piece of real estate, within reason, is better than none at all.
Second, you don’t wait until you’re married. Yeah, it’s all nice and good if you are, but women have to make financial decisions independent of their marital status. Statistically speaking, most of us will outlive any husband we marry anyway, so you need to start accumulating wealth for the long haul that will support you in your waning days when, chances are, you'll be by yourself. This is the same whether you marry or don’t.
Third, even if you don’t know where you’ll end up geographically because of your career, you can always buy something, rent it out if you move, and then buy another house. FHA loans allow for this, and I would imagine that others do, too. BMNB has property in another state, but that didn’t stop him from buying this house with me. Now he has an interest in two properties because he was smart enough to buy something while he was single. He’s now renting out his other property, so someone else essentially (or mostly) pays that mortgage. Sweet. Equity accumulation on someone else’s dime. I wish I had been that financially confident.
So, if you’re a woman, young or otherwise, and using any of the above excuses to avoid buying a house, I call B.S.
If you have another excuse, like bad credit or low income, then I say to you, make a plan to address these issues and prepare to buy a house, especially
if you have children. The equity in your home doesn’t just represent potential retirement savings; it represents college tuition payments or the downpayment on your child’s home. It is this intergenerational wealth transfer that makes the difference for generations to come. It is, IMHO, one of the reasons why black wealth is still outpaced by white wealth in this country – given that our forebears were redlined and discriminated out of the housing market during periods of substantial housing booms – the ‘50s and ‘60s – the accumulation and passing down of equity wealth hasn’t been as common in our race as in others.
You can improve credit over time. You can also get low downpayment loans through the FHA (3%). But the wealth accumulation you are missing out on over the long term while renting -- now, that's going to be harder to make up.
Remember, as a woman, either through choice, death, or otherwise, chances are you will be single in your older years and entirely dependent on the financial choices you make now for your income in the future. Choose wisely. Don’t do like I did.
To get help getting your credit together, go to creditboards.com.
For information on FHA loans, go to FHA.gov.
Okay, no excuses. Get ready and buy a house. You owe it to yourself as a woman.
Labels: BMNB, DINKs, real estate, women and money