All around us, we see what others have. We get jealous at times and maybe even envious of what others have that we don’t. Maybe we even force ourselves to get things that others have even if we can’t really afford them.
It was about 15-16 years ago that I found myself divorced with a massive amount of debt and a car that barely ran. I had owned the car for at least 12 years and let’s just say that I was ready to beat it continuously with a sledgehammer to see how much damage I could do to it.
I lived about five miles from my work and every day, I would use one quart of oil and two gallons of water just to get back and forth a total of ten miles. I saw really nice cars that everyone drove at work and honestly, I was jealous and envious of what they had.
The sad part about it was there was nothing I could do about it. There was no money.
I tried though. I went to several banks and asked for a loan but no one would give me one. When I asked if I could use my car as collateral, they might as well have laughed out loud. No one was interested in using a 12-year old car to back a loan.
I was stuck.
The fan in the front of the car didn’t work either so it was dangerous to be stuck at stoplights because the car would overheat. If I got stuck at a light, I would pull into a parking lot and turn the car off instead. It made for very long trips to the grocery store.
I lived that way for 11-months before I was offered an opportunity to get a loan and purchase a used car from a private owner.
If we aren’t careful, we can end up in a scary situation when it comes to houses. All around us, there are new construction homes going up. Why would I want a used home when I could get a new home that no one has lived in? What if there aren’t many homes available to look at right now? I want something NOW!
As a REALTOR, I see all kinds of houses every week. Holding an open house for a new construction home is really nice. Everything in the house is perfect. Well, everything I can see looks perfect. Looking at used homes I can see how the house has been lived in. There are scrapes on the wall paint, worn carpet, and maybe the owner hasn’t fixed things along the way.
But that nice new home has none of these flaws so I want that one instead.
When I went looking for another car to buy, I set a fixed amount that I would spend on it. Getting a loan when I was already carrying so much debt was scary in itself but I really felt there weren’t a lot of options. I set the price for $9000 and was fortunate enough to get something that lasted a while. Well, it lasted until one of my daughters had a wreck in it. Fortunately, I had it for several years and was able to pay down a bunch of debt in that time.
When it comes to a house, the budget needs to be seriously considered too. Just because you get a loan for a certain amount and the price you want for a home, any home, doesn’t mean the mortgage payment will never change. For the most part, you can expect the mortgage to go up a little each year. If you build that understanding in your calculations from the beginning, you can avoid having issues. I’ve written a post about things that change your mortgage. Read it when you get a chance but in the meantime, mortgages can go up due to variable interest rates, taxes and value assessments. If you’re not careful, you can actually be priced out of your home by these things.
It doesn’t mean you need to go through a foreclosure however, you may end up having to sell your home and humbling yourself by buying something less than what you had before so you can actually afford it.
I kinda left you hanging there with the car. I did do something with that car that needed all the oil and water to keep going. I donated it to the senior high school class with the understanding that they would take a sledgehammer to it and destroy it. I wasn’t able to make the event but I hear they had a great time destroying the car.
I’ve moved on since then. It’s a memory that will stick with me but also one I never want to experience again.
If you need help with the purchase or sale of a home, reach out to me for more information about how I can help you get where you want to be.
I’m never too busy for you or your referrals.
Ebby Halliday, REALTORS®