I will not live on struggle street – published on The Hoopla 20/4/12

7 May

A mortgage does not equal home ownership.

Think about it. Who of us in our lifetime will really own our home, with no payments remaining, no fees, no charges, debt-free?

I can’t think of anyone who owns their home outright. I don’t understand why logical thought leads someone to mortgage a home and then go and live in it.

If and when my husband and I are ever in a position to buy a house or unit again we definitely won’t be living in it.

We’ll treat it like any other investment. We’ll buy it only if we can get a reasonable mortgage which requires a substantial deposit and then, we’ll rent it out. We won’t be borrowing 95 percent of the value and we won’t be purchasing with only a 10 percent deposit. If we never manage to buy a property again, so be it.

We are renting our current home and it’s not perfect, but the financial relief makes it all worth it.

Landlords are just normal people like you and I. I blame current affairs shows for creating the character of the ruthless landlord, just as I blame fairy tales for the bad rap given to step mums.

I’ve never had a bad rental experience. But then again, I’m a very good tenant and it’s really not that hard. Pay your rent on time, look after the house and tidy up for inspections. Done.

When I married my husband we moved nearer to the city and purchased our first home there. Everything was going well, until my husband who was self-employed ran into trouble.

Property prices crashed thanks to the GFC and the ridiculous behaviour of banks and investment groups who thought it was a good idea to sell and trade risky mortgages.

We lost our home pretty quickly.

In fact I should say ‘our home’ because it never was truly ours. It was mortgaged.

A mortgage is really just a contract with a bank to own your home once that final payment is made. Until then your ownership of it is all an illusion.

When financial hardship started to hit, we rang our bank immediately.

They were lovely on the phone. They thanked me for letting them know. Then the scary letters started arriving. After 10 years of paying our mortgage on time or even early, they hit us so hard with ‘late fees’ that we could never hope to catch up. It didn’t make sense. We’re in financial difficulty so they decide to charge us late fees? To help/hinder/power trip? Who knows.

We moved out, found tenants, had some super released and still couldn’t catch up. We rang and begged them to waive the late fees, to add them to the total of the mortgage and they refused.

We had to sell. We made under a thousand dollars in profit from the sale. We were lucky to make anything at all.

You could say this is a worst-case scenario but according to recent data, mortgage defaults are still a regular occurance. Some banks are back to offering mortgages of 95 percent of the value and the rollercoaster ride of home ownership continues.

In Castle Hill (Sydney) , if I were to find the oldest, crappiest house in desperate need of repair I could buy it for around $600,000. A decent house around here, the ‘median’ house price is closer to $800,000. That cheaper house will cost me at least $1000 a week in mortgage payments, as opposed to the almost half of that I am currently paying by renting the aforementioned crappy house. We are saving money and we don’t have to fix anything. We do expect the rent to go up over time but really, we are free of debt.

We have a lifestyle. We are able to save. We can sleep at night!

We don’t have to live in reasonably affluent Castle Hill but this is the area we know and love, our children are relatively safe here, we are surrounded by family and friends and my husband and I travel equal distances to work. The only people I know who are in a good position with their mortgages have substantial help from parents. How many of us get that?

I’m meeting more and more people who are making the same choice as us.

We are still planning for our futures. We are being smart with our money. We pay extra money into our super, we save, we invest in other things if we wish and we never ever have to worry about someone taking our home away from us. Bricks and mortar can no longer be relied upon.

We don’t buy our homes with a view to sell it for profit, do we? We want security, we want the freedom to stay for as long as we want and when we are old and grey it might just be worth something, you hope.

Choosing not to buy a home is a life choice. It’s a choice I’m loving.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: