Homeownership Regrets: Understanding Financial Responsibilities and Choices

Homeownership can lead to financial strain if all costs aren't considered, making self-assessment crucial.

### Navigating Homeownership: Addressing Financial Strain and Regrets
* 🏡 Many homeowners, like Molly, are feeling **overwhelmed by maintenance costs and rising monthly payments**, leading to questions about whether to **move**.
* 💰 The misconception that owning a home is simply about **managing a mortgage payment** often overlooks additional expenses such as **property taxes, insurance, and maintenance**.
* 📊 A staggering **82% of home buyers** reportedly regret their purchases, highlighting the common challenges faced in homeownership.
* 📈 With home values increasing since 2021, homeowners may find themselves in a position to **sell their homes for a profit**, potentially allowing them to **move to a more affordable option**.
* 🛠 It's essential to assess whether the current housing situation is **draining financial resources**, preventing **savings and future investments**.
* 🔍 Tools like home buying calculators can help determine if a housing decision is **sustainable in the long term**, especially if issues persist **beyond 18 months**.
* 🚪 Ultimately, individuals should carefully consider their circumstances before committing to homeownership, as it may **not be the best fit for everyone**.
* 📋 Utilizing resources and checklists can aid in making informed decisions, ensuring that potential homeowners **avoid the pitfalls that lead to regret**.

[Music] Yeah, we've got a question from Molly to kick it off. It says, My husband and I bought a home in 2021. We thought we were buying within our means but are now overwhelmed with maintenance costs and increasing monthly payments. Do we need to move? Yeah, so I think a lot of people are in this situation now because of a few different reasons. One, let's remove for a moment the fact that homes have gotten really, really expensive and that interest rates have gotten high. Before that even took place, owning a home is not an inexpensive endeavor. A lot of people just think, Okay, if I can figure out what the mortgage payment is, if I can figure out the principal plus the interest, well then I can just check the box. But it turns out that when it comes time for home ownership, it's not the same as when you rent it. It's not the same as when, Oh, the air conditioning goes out. I just call a landlord or I call a super or I have some sort of

issue or I don't have to pay homeowners association dues. When it comes to owning a home, there are a lot of other costs that factor in, and if you're not factoring in those costs, I think you can find yourself in a situation like Molly, where you're starting to think, Uh-oh, did I make a mistake here? Well, one of our financial mutants sent us a tweet from CNBC that showed that 82% of home buyers actually regret their purchases, which is so sad. It's a sad thing. I mean, look, I don't think it's unusual. I mean, even anybody who takes on debt, especially like a mortgage, a large debt, you're going to have some type of insecurity about that, but that usually washes out. The thing I do worry about, though, is that we knew with this inflation period that how purchase prices went up dramatically. You don't typically see houses appreciate that much. Well, that's now created a tail that is followed behind in the fact that, you know, property taxes as local

municipalities adjust for these higher values. They're going to raise property taxes. You know, now that you have the replacement cost has gone up on every one of these properties. The insurance cost is also going to go up. So, it's back to the point of affording a mortgage isn't the same as affording a house. And a lot of the things we try to work on here at the Money Guys show is to give you parameters and where the lines are so that you're not, you know, house poor and life poor. And when I first heard this from Molly, I just want to know she's in good company, but we do need to triage. How do we get you on the right path now? First, are there some mitigating circumstances? We all know that the Money Guy rule is you want your housing expenses to be around 25%, but I do give a little asri to that if you live like, um, 'cause I know some of the higher cost of living places are in

coastal areas or in big cities, and a lot of times, you might not have a car in those cities. Maybe you have public transportation or something like that. So, there are things like that that potentially could help Miley say, Okay, yes, you're beyond 25%, but maybe you have something that mitigates it. If you don't have that and you find that you are in that situation where you are house-rich, life-poor, we do need to start figuring out how do we self-correct this problem. Yeah, I think, and what's interesting is if you bought your house in 2021, which it sounds like you did, you have something working to your advantage. There's a really good chance at this point the value of your home has increased. Now, none of us want to have to sell the house that we live in and leave the thing that we love, but it would be worthwhile for you to go out to money guu.vn, house that you have right now, and what you should be able to afford, and you may

have to say all right. I made a bad decision. I got in a house that is actually draining the other areas of my life. Is there an opportunity right now since home prices have gone up over the last two years where potentially I could sell that house and then I could use the proceeds from selling that house to get into another home that's more affordable that will allow me to do the other things that I should be doing like building for the future. So I think that's a hard choice to make but what you want to be careful of is if this house is draining everything that you have and all of your excess discretionary capital's going into it and you're not saving and building for the future then your only option when you get to fin when you get to retirement when you get later in life the only way that you're going to recoup value from that is by selling that house. So it's probably not going to be your forever home anyways if right now it's causing all of your capital to go in there. So I

think you have to assess and see do I need to make a difficult decision right now so don't skip the step that Bo just laid out for you. I want you to go look to go to money.com resources, look at the home buying calculator, see how far off course you are from that, and then ask yourself is this a short-term problem or is this a long-term problem. If it's anything really Beyond 18 months that you can't write the ship, you probably are going to have to make the hard decision and figure out how you know how do you either bring on maybe rent out a portion of it or you even have to make the hard step of changing your housing decisions and selling the house. Let this be a cautionary tale. We love home ownership and we think it's wonderful but it does not mean that it's for everyone. Don't think that just because you are a specific age or a specific stage of life or because you've checked some other boxes that you absolutely have to jump on the side of

home ownership. You need to really assess, is that what makes sense for me in my current circumstance? Because I think far too many people, especially with today's prices, are jumping in just because somebody said, Oh, I need to own a home. I need to get there. Let this be a cautionary tale that the grass might not be greener just because you go and buy a home. So, close it out, go to moneygo.com resources, look at our home buying checklist, look at this resource so you don't end up like the 82% of people in Molly who have regrets. Let's go into this thing with our eyes wide open, so you measure twice, cut once, but come out the other side feeling good about your financial choice.

We Regret Buying Our Home! What Should We Do?

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The Money Guy Show

Many new homeowners are feeling overwhelmed by maintenance costs and increasing monthly payments, a common situation exacerbated by rising home prices and high interest rates.

Owning a home involves additional expenses beyond the mortgage, such as maintenance, homeowners association dues, and unexpected repairs.

A significant percentage of home buyers, 82%, regret their purchase, highlighting the financial insecurity and challenges that can come with taking on a large mortgage.

The Impact of Rising Property Values on Homeowners

Municipalities are raising property taxes and insurance costs due to increased property values.

The Money Guys show emphasizes the importance of keeping housing expenses around 25% of income, with some flexibility for high-cost living areas.

Homeowners who bought in 2021 may benefit from increased home values, and it's suggested to reassess financial situations to avoid being house-rich and life-poor.

Reevaluating Homeownership: A Difficult Decision

The current house is draining financial resources and hindering future planning.

With rising home prices, selling the house could provide funds for a more affordable home.

It's important to assess the situation and consider making a difficult decision if the financial strain continues beyond 18 months.

Assessing home ownership is crucial, especially with today's high prices.

Many people rush into buying a home, thinking it's the solution, but it may lead to regrets.

It's important to use resources like a home buying checklist to make an informed decision and avoid common pitfalls.