Housing

Rent vs. Buy: Which is Better?

Is it better to rent a place to live or to buy one? It’s a question that I get asked multiple times per week in some form or another. Usually, it comes from young couples who are being pressured by older people in their life to get out of renting and buy a home or …

The “Cheap Neighborhood” Problem

Connie writes in: “Right now, we pay $1,000 a month in rent. About ten minutes away, there are houses available that are as low as $300 a month in rent and they’re perfectly fine houses. The problem is the neighborhood. The area is loaded with people on welfare and most of the yards are really …

How Much House Can I Afford?

Another common email I receive from readers concerns whether or not the sender can afford a particular house – or how much house they can afford. The stories vary a lot in detail – some people have a down payment, while others do not, and some people have other debts, while others are debt free. …

5 Simple Tactics to Reduce Heating Costs

It is cold here. Really, really cold. During the day, I usually turn the temperature in our house down fairly low. I work on the top floor, where it’s usually a few degrees warmer than other parts of the house, and I wear layers of clothes and warm socks. Because of that, I usually feel …

Categories: Frugality, Housing

Is Home Ownership Worth It?

Megan writes in: “My husband and I are looking at purchasing a home next year. My parents and siblings think this is a great move and are giving me info on buying a home and how great the investment is. His family is adamantly opposed and they say that homes are a money pit that …

“House Poor” Versus Controlling Your Own Destiny

Anyone who’s been awake to watch the changes in the economy over the last five years is familiar with the burst of the housing bubble. Too many people were given mortgages that were bigger than their budgets could handle and when those people couldn’t pay, the banks that offered those mortgages were in serious trouble. …

Renting Isn’t a Throwaway

Kelly writes in: “Sometimes you encourage people to rent instead of buying a home ASAP. This seems like a giant waste of money to me. Renting doesn’t build equity or help with taxes.” When it comes to housing, I do not believe that either renting or buying living space is the right answer for people …

Want to Save Enormous Amounts of Money? Change Where You Live

One of the most mystifying things that readers write to me about is when they’re living in a very expensive urban area and struggling with a minimum wage job or just above it. I received a note not long ago from “Jenny,” who lived in San Francisco and made only $22,000 a year. She shared …

Setting Up a New House on a Tight Budget

You’re moving into a house or into a large apartment for the first time. You take all of your stuff there, unpack everything… and you quickly realize how spartan it is. There are lots of things you need… or you at least think you need. Silverware. Flatware. Tables. Furniture. Minor appliances. The list starts small …

Categories: Frugality, Housing

Do Low Interest Loans Change the Rules For a Mortgage?

A lot of different “rules” are passed around regarding the size of a mortgage that a person or a family should take out in order to afford a home. One common one I see and hear repeated is that you should never take out a mortgage that has a value of more than twice your …

Doing the Math on Home Ownership

In 2007, Sarah and I made the decision to become homeowners. We had fixed our finances to the point where we were ready with a down payment on a modest home. We were also under the belief that home ownership was the sure-fire way to build equity. When we bought our home, we discovered that …

Categories: Housing

Home Repair: Insurance Advice

This is the second installment of The Simple Dollar writers’ personal stories. Take a look at Karla’s story about naming her baby the beneficiary of her life insurance policy over here. Today, I’m excited to share Randy Woods’ experience with home insurance claims and how much of a Catch-22 they can be. Be sure to …

Categories: Housing, Insurance

Storage Space and Spring Cleaning

Storage space is one of the biggest money drains that people have. Think about it for a second. What do you do with storage space? You fill it up with stuff that you don’t have any consistent use for. If you had a consistent use for it, it wouldn’t be in storage. Most of the …

Categories: Frugality, Housing

Picking the Right Spot for a Home

When Sarah and I first moved into the home that we currently live in, it made sense in a number of ways for us. Our jobs were in two different towns about forty minutes apart, so it seemed to make sense to live in a place that was halfway between the two so that neither …

Categories: Housing

Buying Less House Than You Can Afford

Recently, I was browsing through my journals from early 2007, the period when Sarah was pregnant with our second child and we realized that we needed a larger home. We spent a lot of our time in that period house-hunting. We had really turned our finances around over the previous year, and The Simple Dollar …

Home Mortgage Rates Are Low: Should I Buy?

This past week, mortgage rates hit a new record low, bottoming out at a 3.79% average for a 30 year loan. A fifteen year mortgage is now at 3.04%. This is compared to rates that were 4.64% and 3.82% a year ago, respectively. To put that in perspective, if you have a $200,000 home loan, …

APR, APY, and Mortgage Math: A Real World Example

I have lots of readers here in the central Iowa area, so it came as no surprise to me that when I began hearing an ad frequently on local radio advertising a particular mortgage product in terms that were a bit on the confusing side, I received an email about it. Jim writes in: I …

Why Not Walk Away from My Mortgage?

Kelli writes in: My husband and I are sitting on a thirty year mortgage (with twenty six years left to go). We still owe $330,000 on our home. A week ago, a very similar home to ours two blocks away sold for $220,000, so we’re under water by at least $100,000. We are thinking of …

Raising Deductibles to Save Money on Insurance: Does It Work?

One common, painful bill that we all face is the insurance bill. Whether you’re talking renters insurance, home insurance, or car insurance, the bill feels painful because it’s not something we can often directly see the benefit from. It just comes in handy when something goes wrong. One of the most common tactics that you’ll …

Categories: Housing, Insurance