Challenge #1

sr d writes:

even though you are in a bit of a economic slump, you have continued to focus on buying a house, SOON. why is that? does owning your own home have some special significance? do you think that it is the best thing to protect your personal economy?

thank you for your answer.

And it’s a great question, even if the “you” definition of economic slump could be applied to me as an individual, or the United States as a whole.

I’m not sure where sr d hails from, but here in the States, there are extremely good tax benefits for owning a home. Furthermore, I’m throwing away $600+ a month in rent for a one-bedroom apartment. Why not invest that money in a house and reap the tax benefits?

As for the economic slump part, I’m going to answer that in two parts: personally and nationally.

1. Personally. Yes, I have been in a bit of a slump, but I am now at a new job where I am making more than I ever have in my life. It’s with a stable, Fortune 500 company. I am rapidly digging myself out of debt and catching up on the things that fell behind while I was unemployed.

So I’m coming out of my slump, but I am also being very careful about it. I have plans to save as much as possible over the next six months, while paying down debt, because I’m aware of how bad the economy is. Furthermore, I have started to push back on the homeownership thing a bit, and am targeting December 2008 as the earliest date to buy. (The best part of all this is that I qualify for the VA Home Loan Program, which guarantees a mortgage, and fixed /low closing costs.)

2. Economically. Right now, no buying a house isn’t the smartest thing to do — the economy being what it is. That’s why I’m waiting until toward the end of the year. Depending on where things are in November, I will start moving then toward buying. Housing prices continue to fall and I would like to buy my house as close to the bottom of that trench as possible. That will minimize the short-term loss in a declining market and help build equity when the rebound eventually happens.

Beyond those things, I’m 35 years old and have never owned my own home. It’s about time I grew up a little bit and started thinking in the long-term. Plus, I’m at the point where I’m starting to need extra space and I’d like a garage so that I can do things like work on my bikes without trashing my living space.

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