Consider Finances Before Opting to Buy

I read with interest the first-time buyers’ stories (“Tales From the Trenches,” March 28).

I would like to explain why we are still in an apartment and will be for another year:

* Make sure your house fits into your other financial goals.

We have too many friends who thought that the housing market was leaving them behind, so they are jumping into hundreds of thousands of dollars of mortgage without considering how much they are saving for retirement, how they plan to pay for their child’s education and the quality of life they have once they are into their home.

Even if relatives will give you enough for a down payment to get into a home, unless you have a financial plan of how to pay for the monthly payments and meet your other financial goals, the relatives’ gift might be better spent elsewhere.

* Make sure the numbers make sense.

Our eager friends have rushed into mortgage payments that are two to three times more than what they are currently spending on housing, anticipating that the increase in housing prices makes their decision financially sound.

Equity is a great thing, if you can afford it.

* Understand the true costs and benefits of owning a home.

I am shocked by how many people do not figure the total costs of owning their home (water, trash, maintenance, etc.) but quickly point out the benefits (the mortgage interest tax deduction, the increase in equity) of owning the house.

While I don’t disagree with the benefits, it is important to remember that the total costs are very real.

* Don’t believe the hype.

It seems that once you reach a certain age, everyone wants you to move into a home, especially the folks who make money off the decision--real estate brokers, other homeowners who want their own houses’ price to increase with more buyers in the market, etc.

However, there is nothing wrong with you if you continue to rent, especially if you have a sound financial plan and have other priorities.

My wife and I will continue to rent until we hit our target home savings (in 14 months, we hope).

JAMES DIXON

Woodland Hills