Dear Joint Accounts,
Two years ago, my husband and I bought our first home and almost immediately regretted it. Our home required so much fixing up (and still does) that it’s become a major added stress in both our lives.
We’re so miserable that even though moving wouldn’t be financially advantageous, I think it’s worth it. My husband disagrees — he thinks that we’re too financially tied to the house, even though the stress is putting a strain on our relationship. Am I being too shortsighted on this? Or is he being stubborn?
Bring on the Packing Boxes
Something that drives me crazy is how we tend to treat homeownership as an unqualified good move. Contrary to popular belief, buying a home is not always a sound investment. Too often, people feel pressured to transition from renting to owning just because it feels like the next step, or because they believe they should. You’re past this point, but it bears repeating for other potential homeowners: A mortgage is a loan, and just because there’s a house attached to that loan doesn’t mean it’s always smart to stretch your finances to take on the debt. A home is presumably the biggest purchase of your life, so it’s crucial that you take plenty of time to consider it.
On to your predicament. You can take at least a little comfort in the fact that you’re far from alone. Plenty of first-time homebuyers find themselves “house poor,” spending so much on the down payment and closing costs that they have little cash left over once they move in. It’s a financially vulnerable place to be, especially when even more maintenance and repair projects pop up — and they inevitably will.
Now that you’re here, though, let’s break down the factors, both financial and emotional, that can help you and your husband decide whether to stay or go.
As a general rule of thumb, the longer you stay in your home, the more it pays off — you’re paying off the principal of your loan over time, while your home appreciates in value. Typically, at the beginning of your mortgage, most of your monthly payment goes toward interest, a throwaway cost. Depending on how much you get for your home when you sell it, and how much you’ve already sunk into other expenses like insurance, maintenance, and taxes, you may even lose money if you sell too soon.
On the other hand, how much more will you spend on those same expenses over time, and what could you do with that money if you rented or downsized instead? Could you invest it and get a better return than what you may build up in equity from the house?
There’s no universal magic formula here. The answer will depend on where you live, how much work the home needs, what the housing market looks like in your area, how much you would pay in rent, how much cheaper a downsized mortgage would be — the list goes on. You also have to consider what your budget for daily living will look like in either case. If staying in your home means you can’t afford other things that are important to you, ask yourself if the equity is worth it.
It’s not just about the money, though. Emotionally speaking, what is it going to cost you to stay, and how is your husband going to feel if you move? Which decision will have a better impact on the well-being of your family and the health of your marriage?
My gut feeling is that if this house is putting a strain on both your relationship and your finances, moving is the better option. It would suck to lose the equity, but you would be gaining some financial breathing room. And if you’re as unhappy as your letter suggests, constantly feeling broke is only going to make things worse.
But before you make a decision either way, take the time to crunch some numbers. The New York Times Rent Versus Buy calculator and this downsizing calculator are a few of the tools out there that can help you calculate all of the costs associated with owning your home over time. Once you and your husband can objectively see the financial costs and benefits associated with each option, it will be easier to come to an agreement about the emotional stuff.
If you’re still at a standstill, however, it’s time to talk about a compromise. Some questions to consider in doing so: What would need to happen for the relationship strain to go away? Is there something that could make you feel better about this house? Can your husband agree on some terms for moving — if the house gets an offer above a certain amount, for example, or if one more costly repair project comes up?
You may well discover that the house has become symbolic of larger issues that need to be worked out in your relationship. But if it’s truly about the house and the financial problems it’s causing, it might be time to sell. There will be other houses. And none of them are worth making yourself miserable.