Ramblings from the Desert

The man who trades freedom for security does not deserve nor will he ever receive either. ~Benjamin Franklin

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Location: New Mexico

Author of the urban fantasy novel, The Music of Chaos, and the paranormal romance, The Canvas Thief.

Sunday, March 20, 2005

The Mortgage Myth

Sunday morning around Chez Kirby starts with breakfast and watching a real estate t.v. show.

After the real estate show, there is usually an info-mercial for the Little Giant ladder. (Which the J-man watches with longing in his eyes.) The last couple of weeks, however, there's been an info-mercial for KB Homes, hyping their low-cost housing (supposedly) and the American Dream.

I find it all rather misleading.

KB Homes contends that the American Dream is within anyone's reach. The commercial goes on and on about how great home ownership is, without actually giving any real benefits [for owning a home.] Worst yet, they ignore the myriad of reasons why homeownership isn't for everyone.

KB Homes biggest contention is that paying rent is like throwing money away. An overly earnest woman tells the viewer how she was "paying a lot of rent and not getting very much."

What, pray tell, did she expect to get for her rent? Rose petals on her bed every evening? Assuming the rental property was properly maintain, safe, etc., she was getting exactly what she'd get from owning her own home (or townhome.) More, in fact.

The problem is that builder/developers like KB Homes (and for that matter, charitable organizations like Habitat for Humanity), put forth the very false notion that home ownership consists soley of paying the mortgage. Anyone who's actually owned a home for any length of time can tell you that there is much, much more to it (financially).

Let's say your roof springs a leak. If you're renting, you give the landlord a call and then he or she takes care of the problem, at no cost to you. It's the law; in the U.S.A., at any rate. Though the law varies somewhat from municipality to municipality, the landlord is required to keep the property liveable and safe as per building codes.

If you are living in your own home, guess who foots the bill? You. Pipes burst, roofs leak, stuff breaks and you have to fix it all. No landlord riding to the rescue. Routine maintenance and seasonal work (setting up the cooler/heater) are your responsibility as well.

If you're handy, as my husband is, it may only cost you materials. With a big repair, however, the materials alone may cost hundreds of dollars.

And don't forget the bigger maintenance issues like repainting/restuccoing, etc. "New" homes don't stay so forever.

KB Homes fails to make any mention of the cost of maintaining a home. Just because someone can afford the monthly morgage doesn't mean that they have the money to keep the home up.

So what if they don't? "Big deal," some might say. Well, if the point of home ownership is to build equity, it's rather hard to accomplish that when the home is deteriorating, year after year. Ultimately, all the equity/value only comes to fruition when the home is sold. The sellers will be forced to unload their dream-home-turned dump at a significant discount or with financial allowances for all the repairs they should have done. So much for building equity.

Also annoying is the contention that rent is "someone else is getting rich off of you." First, unless you live under a rock in the middle of the Atacama Desert, someone is always getting rich off you. Got cable t.v.? A car loan? Do you shop...anywhere? You give those folks money, don't you?

Second, while many apartment complexes generate significant monies for their owners (often corporations), this isn't necessarily the case for other rental properties. Income from rental property varies from a comfortable living, to simply covering a mortgage on a property that the owner couldn't sell.

And finally, do people believe that mortgage companies/banks lend money out of the goodness of their hearts? They are in it to make money, folks. Scads, and scads of money. Off you and your mortgage.

I'm a home owner* and damn happy about it. (*Ultimately it's the bank that owns the place; they bought the place and let me live there in exchange for 30-years of debt.) But I have to wonder if the Mortgage Myth, as perpetrated by builders like KB Homes, is building bankruptcies and deteriorating housing stock, rather than "communities."

I got the link for the early galleys over at Neverary, so I need to mosey over there and check for typos and other stuff before it goes "live" in April.

Still waiting for the host of stuff trapped in the submission black hole.




Graphics and Content Copyright © Patricia Kirby 2005