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Are You Buying a House or
a Home?
As you read and study about buying real estate, you will
often find the words "house" and "home" used interchangeably.
There is a huge difference between a house and a home.
A house can be a place to eat, sleep, park your car, and put
all your "stuff" (including other family members). It is a
material possession and an investment. A home is where you
feel comfortable, warm, safe, and protected. A home is where
you live.
A house is something you buy logically. A home is an
emotional purchase. When buying real estate you have to
balance your emotional wants and your logical needs because
there will almost certainly be a time when the two conflict.
Example
For example, you may want a house with a view, but the
payment is higher than you feel comfortable with on a
thirty-year fixed rate mortgage.
What do you do?
Purchase the house anyway and budget more carefully for the
next few years? Buy the same house without the view and get
it cheaper? Make a larger down payment by borrowing from your
401K or family members, so you get a lower payment? Get an
adjustable rate mortgage with a smaller payment instead of a
fixed rate loan? Or buy a smaller house and still get the
view?
When viewing the house, most people look at it emotionally
and envision it as a safe, happy, comfortable home. Later,
when making the offer or filling out a mortgage application,
your logic may begin to kick in, instead.
Balancing Act
The trick in buying real estate is to view all decisions with
both a logical perspective and an emotional perspective. If a
situation presents itself that requires a trade-off, decide
on whether there is a huge conflict or a small one. Logic
should win the big conflicts, but emotion should always be a
factor, even winning the small ones.
You will find yourself owning a warm, happy, safe home – and
an investment for the future at a price you are willing to
pay.
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