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Understand How a House Fits into Your Financial Plan and Our Leaders' Council on Home Buying

Buying a home is not easy. The purchase of a home will likely be the largest financial commitment that you ever make. As such, you should not rush into this commitment. If you use wisdom and judgment in trying to decide what you want, what you can afford, where you want to live, and if you will listen to and obey the promptings of the Holy Ghost, you will make correct decisions regarding your housing needs.

There are risks in home ownership—not just the risks of owning the home, but the risks of owning the wrong home. What happens if you buy a house that you can’t afford? Your most important financial goals will likely be downgraded to goals of minor importance because you will not have sufficient funds to meet them. Individuals in the situation of owning a house they can’t afford are referred to as being “house poor.”

What if you buy a “fixer-upper,” but you don’t have the necessary skills or time to do the fixing up? Your new home will remain a fixer-upper.

What if you buy the wrong type of house for your lifestyle? For example, if you are a “condo person” in a family neighborhood, you will likely pay others to keep up the landscaping and other exterior elements.

Or what if you buy a house without obtaining the necessary inspections? You could pay dearly for the problems that the previous owners left behind and should have fixed before your purchase.

Finally, what if you get too far in debt, and you lose your job? Quite simply, you could damage your credit score, lose your house, and lose your self-respect as well.

Church leaders have counseled us to live within our means and stay out of debt, but there are two exceptions to this counsel. President James E. Faust stated the following:

Over the years the wise counsel of our leaders has been to avoid debt except for the purchase of a home or to pay for an education. I have not heard any of the prophets change this counsel (“Doing the Best Things in the Worst Times,” Ensign, Aug. 1984, 41).

President Gordon B. Hinckley shared what his father told him regarding a home:

We have been counseled again and again concerning self-reliance, concerning debt, concerning thrift. When I was a young man, my father counseled me to build a modest home, sufficient for the needs of my family, and make it beautiful and attractive and pleasant and secure. He counseled me to pay off the mortgage as quickly as I could so that, come what may, there would be a roof over the heads of my wife and children. I was reared on that kind of doctrine (“The Times in Which We Live,” Ensign, Nov. 2001, 72).

President Hinckley further counseled us on buying a home:

I recognize that it may be necessary to borrow to get a home, of course. But let us buy a home that we can afford and thus ease the payments which will constantly hang over our heads without mercy or respite for as long as 30 years. . . . I urge you to be modest in your expenditures; discipline yourselves in your purchases to avoid debt to the extent possible. Pay off debt as quickly as you can. . . . That’s all I have to say about it, but I wish to say it with all the emphasis of which I am capable (Gordon B. Hinckley, “To the Boys and to the Men,” Ensign, Nov. 1998, 51).

Based on the prophet’s counsel, we can see that our challenge is to determine what a modest home is. The Handbook for Families recommends the following:

Avoid spending more than 25 to 40 percent of your take-home pay for the total house payment, including insurance, taxes, and maintenance costs (“Preparing for Emergencies,” Ensign, Dec. 1990, 59).

That advice gives us a good start as we begin our study of home buying.


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