Home Sweet Mortgage: Isn’t Debt Bad?

At the place we’ve been hanging out on Sunday’s here in Nashville, a number of people have purchased homes in the last 1 1/2 that we’ve been there. It’s not a large community so it was a significant percent of the people that were making this major life decision/change/move. I posted on the online forum and tried to strike up some conversation about it, but was met mostly with perplexed looks. Basically, I wanted to know how as people of faith, they processed through choosing to purchase a home. I was hoping for a whole sermon series on it, but there wasn’t one.

It’s my understanding that if you believe in something as truth, then it should affect every facet of your life. This isn’t exclusive to religion or faith, our faith in gravity applies as much to standing in a bathroom as looking over a cliff’s edge. A couple verses in the Bible run through my mind specific to this idea of thinking about everything we do as it relates to our beliefs and faith:
“we take captive every thought to make it obedient to Christ.”
“And whatever you do, whether in word or deed, do it all in the name of the Lord Jesus, giving thanks to God the Father through him.”

I would venture to say most major religions, and most people of faith, understand it’s impact on everything they do. That being said, I honestly wanted to know the thought process folks had gone through in deciding to purchase a home. It wasn’t that I disagreed with their choice, I just wanted to know more, and I finally realized, there wasn’t more.
Buying a house is just something you do. Just like millions of other little things every day that are just a part of our society, part of the “American Way of Life.” And boy is it dangerous.

The Old Testament book of Proverbs is chock-full of maxim’s about the dangers of debt, “The debtor is slave to the lender.” And yet we take out student loans (even I am guilty) and home mortgages without thinking twice about it. Most folks eventually pay off their student loans, but I’m not sure I know a soul who actually owns their house. We refinance, we upgrade, we take out second mortgages to our hearts content, and I don’t think most Christians have even given a thought to how their faith should affect that part of their life.


Mindy and I are about to have our first child. She’s about to finish school and we’ll pay off all our loans in a couple years. I can see the benefits of owning rather then renting, but I also see some of the negatives. I see the trap of wealth and greed, of always wanting more and going into debt to get it. Everyone around us seems to be buying houses, you would almost think it’s a necessary part of following in the faith.

Houses make me think. Does isolating ourselves in single family home make it difficult to carry out Christ radical call to love our neighbors and live in community with other believers? Does living in perpetual debt keep us from being the generous, sharing, and financially open church Christ calls us to be? Does the “American Dream” really look like what Christ aspires for us to obtain, or are we terribly off-track?

25 thoughts on “Home Sweet Mortgage: Isn’t Debt Bad?”

  1. The system ate my initial comment, so I’ll try again. Dave Ramsey has a pretty sound biblical view of debt, and even he concedes that home mortgages are acceptable in today’s economy, if not ideal.

    I think you’re right about the general trend toward ridiculously large houses; however, appearances can be deceiving. We bought our first home six years ago. The mortgage was WAY less than renting anywhere, which allowed me to stay at home with baby and still pay off all my husband’s student loans. We used part of the profit from that house to send my husband to graduate school without any debt. We rolled our equity from one house to the next, keeping our payments affordable on one teacher’s salary.

    We’re on our fourth house now. If you look at the neighborhood, you might assume that we took out a huge loan to live here. But you’d be wrong–we bought the smallest house near my husband’s work, so we’d lose less family time to a commute, and so my husband could bike to work. We should have zero debt in a few short years.

  2. meredith,

    sorry to swallow your comments. They actually just got tagged to be moderated (sometimes happens) but there they are above. I’ll try to fix it so it says something like “hey your comment will post shortly.”

    Anyways, about your thoughts. I definitly hear you. As a bike to work guy myself I’m a fan of what you’ve done.
    And I’m certainly not saying that buying a house, having a mortgage, etc is necessarily bad, I’m just trying to ask the question.

    I don’t think enough people are asking the questions. I love the idea of not paying rent and owning a home (I mean owning, not having a mortgage), there is so much good you could do through your finances if you didn’t have a monthly house payment or rent bill to pay.

    Yet, I do wonder a bit about it all. I just wish we were talking more about these things in the church. You know, maybe that would quell the “bigger and better” housing attitude in the church. It doesn’t take much peeking at Scripture to think that our lavishly large houses are a bit out of line with Christ’s calling on our lives.

  3. interesting thoughts. i don’t want to buy a home, even though the american dream (and MANY of my friends tell me i should). however, i do wish i had a bigger place, even a spare bedroom to be able to offer people who need a place to stay. what i am trying to figure out is if it is bad to move to a bigger place. i would love to have an extra bedroom for people to stay in, but then i would be spending extra money. its a tough decision.

    oh, and i know someone who has their house paid off….my parents. its pretty neat. but rare.

    just a few random thoughts for you. lets discuss this in person sometime.

  4. As a recent mortgage-taker-outer, I can offer my take on the matter.

    We did struggle with taking out that much money (and we actually moved into a house that was much smaller than the apartment we were renting), but we eventually decided it was the better thing to do. My job is essentially a three-year-gig, and we knew we’d have to be in town for at least that long. If we rented for 36 months, even at the low rent we were paying, at the end of three years we’d have “lost” over $18,000. But, by finding a mortgage that was as much as our rent, at the end of three years, even if we don’t make any money on the house, we won’t have pissed away that 18k. We also were thinking long term, about the financial needs of the place we’d like to minister, and buying a house now made the best sense for setting us up later.

    Hope that insight helps…

  5. totally agree. honestly. we had no clue about what all was involved in buying a home. we just knew we were newlyweds and felt entitled to a home. its not that we hate our home. it’s just if we could go back, we would definitely rent. to be honest, if it was up to me, i’d rent for the rest of my life at this point. or do common living with another couple(s).

    just a little bit of the upside-downness of homeowning. out of the $1000+ we pay each month . . . $750 is interest. we’re paying less than a fourth on the real thing. which means that my modest 1500 square foot suburban ranch that is about $170,000. we’re actually paying $450,000+ over the course of the loan.

    which in my humblest opinion nominates me for dumbass newlywed of the year award.

  6. Josh,
    Thanks for that perspective. I think so many people ignore the costs to a house and just give the “saved money” figures. My friends who we moved in with (renting) together were looking last summer and blew a bunch of money on inspections trying to find something. There’s also the interest. There’s also insurance. There’s also usually more per month in utilities. I wouldn’t say your dumb, I would say your pastor should have been preaching to you on the topic at least.

    GKB,
    Thanks for sharing your perspective too. I definitly have felt the need to not “throw away” my money. At times I’m skeptical at how true this is. Currently we pay a ridiculously low amount for rent because we split it between 7 adults. Granted if someone owned the place we are renting it could all go to their mortgage, but I still think we need to step back and think about it. Are there additional cost you’ve faced that you wouldn’t have owning a home? Maintenance?

    Jody,
    First, I love that you want to share. And I like your current place. I think you need to find a group of folks to live with. Rent will be cheaper, and you can probably pull off an extra bedroom.
    Do you never want to buy a home? Not saying you should, just curious. We are considering it, just considering how to do it if we did.

  7. i’m not sure about buying a home. there are several reasons i choose to rent. 1st, this way i can move away at a moments notice, i am not tied down. 2nd, i think that you get ripped off by paying interest….like josh said. you end up paying double, or more. it doesn’t make much sense to me. 3rd, taxes are high on home owners, and i pay NO taxes when renting. 4th, house repairs…my pipes busted a few weeks ago. my landlord came over and fixed them the very next day. i didn’t have to pay a dime and i didn’t have to miss work so i could stay home and wait for a plumber. the same thing happened a few years ago when my fridge broke. i got a new one, at no cost, and it was there and installed the next day! 5th, i don’t have to mow my lawn or do any upkeep. these are a few of my reasons, mostly its financial. many people say you are throwing your money away when renting, but with all the extra costs of owning: repairs, taxes, utilities (usually higher), lawn care, closing costs, inspection costs, and interest……i just don’t see where its cheaper.

    as for getting roomates, i have been thinking about that a lot lately. but i have already written way too much, so we can chat about it tonight at movie night! 🙂

  8. I think you raise an interesting point here. Home ownership may not be for everyone, but it has saved my family a substantial amount of money, and like Meredith, has allowed me to stay home to raise our children.

    I think a lot of the issues with interest tie into a person’s current credit. For example, we pay a ridiculously low interest rate on our mortgage – 4 percent. We were able to get this rate because we have excellent credit and have been careful stewards of our finances. Because of the low rate, we are able to pay extra on our principal every month, thereby paying off our mortgage sooner, and cutting the amount we pay in interest.

    Plus, when we sell our home, we fully expect to have all the money we’ve spent returned to us.

    Many churches in my area have sermon series on money management, although I don’t know if any have specifically addressed the case for homeownership.

    The other thing that is important to remember (as much as I dislike it) is that the taxes you pay as a homeowner go to support your community and community programs for a variety of issues – which is also part of what we are called, as Christians, to do. More homeowners (of the responsible type) create a stable, thriving community that can provide services to the poor and needy – which is a big part of being a Christian, in my opinion.

  9. Jody,
    Thanks for the chat this evening. I think your making great decisions related to the housing thing. Definitely would encourage you to look into community and roommates.

    Goslyn,
    Appreciate your insight. Seems like you’ve done a good thing financially. I’m still skeptical of some of it. And I wish more conversation happened in the church, not just about money, but about all these sorts of decisions we tend to make.
    As for the Taxes, I think you and PK from my other post might have an interesting discussion.

  10. since we have been foreclosed on recently due to a series of bad things happening to us- loss of job, open heart surgery, hurricane- we are in the position of renting soon and have thought of ways to buy eventually again. with our bad credit now that is up in the air. i’d like to see a discussion of how to pay in full for a place. i know someone who paid $5000 for a dump and fixed it up beautifully!! i want to do that!!!

  11. Jody: You do pay taxes. It is one of the things rolled into your rent. The homeowner has to be making a profit, including ALL the costs of owning the apartment (his mortgage, his interest, his taxes, repairs), or he wouldn’t keep renting. In fact some people (in some parts of CA, at least) who bought properties just to rent out are being foreclosed on now because they can not rent them out for enough to make their bills.

    I have bought in the past. Was able to live in an area for much less than I could have rented in the same area because of the mortgage I had. And, when we sold, made enough money on it that my husband will be able to stay at home with our baby and go back to school for what he wants to do. Opportunities we would not have had. We are renting right now since we are not sure we will be in the area for long enough to buy (in fact we are certain we will not be) which opens the money to other uses for now, realzing we will need to replace it next time we want to buy. But I have many frustrations about renting. I can not choose to change out the sliding glass doors for French doors that will let out less heat. I CAN not replace the refrigerator we have with one I like better. I can’t even replace lighting fixtures where the bulbs break when I try to unscrew them but have to wait for the landlord to come out here and take a look at it. It isn’t my place to make my own decisions about.

  12. I like the idea of questioning what one’s real goal with possible home ownership, and as a homeowner for about 8 years I defintely see the tendency to be more isolated than one might be in an apartment or shared housing but I do want to comment about some of the assumptions being made about the costs of renting vs. owning. As Boaz’s Ruth points out, nothing you are getting from your landlord is free. Perhaps the landlord is amortizing the costs over a longer period than you intend to rent but also the landlord is gaining property value through appreciation over that same longer period of time. Secondly, Dave Ramsey and Mary ? from Debt Proof Living make some good points about the cost of interest but I also just read “Missed Fortune” (there is also shorter version Missed Fortune 101) by Douglas Andrew and he makes some very good points about the ACTUAL costs of a mortgage after tax deductions are taken into consideration, and also the long-term gain in equity. Not to suggest that there is one right answer for everyone, but that there are a lot of aspects–lifestyle, ethics, values and economics–to consider.

  13. MBR and Alison,

    Thanks for your thoughts. I definitly hear you about some of the equity values of home ownership and the hidden costs of renting, but I think there’s still discussion to be had.
    I think it might be worth a little bit of example giving and number crunching to see if there is maybe more to this idea of renting then we might think (as far as investing goes).

  14. One other thing to throw into the (excellent) discussion going on here:

    Imagine a neighborhood full of homeowners versus a neighborhood full of renters. Which do you think will be a more cohesive, thriving community? I would submit that, if you want to build good community, you might have to invest yourself and “tie” yourself to a specific community. There’s way too much transience and “God told me to go _____” in our culture for lasting, meaningful community to be built. Buying a home is planting your flag and saying, “I give myself to this community.”

    Of course, that’s going to be a bitch if it’s in the suburbs, but that’s another story…

  15. Very interesting post, and great subsequent comments. This is a very good discussion on a topic that is not addressed nearly enough! (and should certainly be more so in the church)

    I think the task here is for Christian communities to challenge the powers of this day and provide a counter-cultural alternative. Maybe it’s even a justice issue that banks are plunging families deep into debt by charging exorbitant interest rates.

    This idea is from a great book by Tom Sine, “Mustard Seed vs. McWorld”:

    What if older members of a church, who have long been out of debt, take a stand and bless the younger generation by offering low or no-interest loans? How much more would this empower younger people to have time for family and church community and set them free from the paycheque-chasing rat-race lifestyle?
    This can be done in conjunction with missionally investing in a neighborhood and living in community, and this is discussed much better in the book.

    I totally agree with Matt about home-ownership and commitment. I want to join a few members of my church and intentionally move into a particular broken neighborhood and live among the people our church is trying to serve. This may involve buying a house, duplex, or sharing the purchase of an apartment building and living in a co-housing situation. Investing in a community can be an extremely positive impetus for change.

  16. personally, I prefer the ideas of getting people to stop borrowing money than expecting someone, because they are church family, to be willing to loan money to someone in their church for less than they could otherwise get.

    If that person would be willing to GIVE the money to the person they are giving the low-interest loan to, great. It might be a way of helping them dig out. But not as a “Because you are a christian you ought to do this” sort of thing. Because right now, churches have all sorts of problems with people coming with hands out, expecting the church to solve their problems. This idea I fear would just increase that problem. even Christians get in trouble with debt, borrowing more than they can afford, etc. that is, after all, the reason this topic came up in the first place.

    I think it does these people a great deal more to sit down and teach them how to handle their finances, including them being able to say No to their wants. Rather than giving them low-interest loans, even for “good” things that would enable them to spend money they would otherwise spend on those things on more frivolous stuff. (I’ve seen this. People taking welfare/WIC because they can, and then using the money they no longer have to spend on groceries, etc for cable, cell phones, trips to Scotland and other things that, if they had to make decisions with their own money, they might be better off choosing to do without for a while)

  17. wow, Ruth, sounds like you have some personal issues here.

    Whoever “these people” and “them” are, I don’t know, but perhaps you should expand your thinking a little here that perhaps not everyone has consumptive financial issues who wants to take advantage of generosity. And even those who do, does that mean we should stop giving?

    Until you deal with your cynicism towards these people you know, you probably will have trouble giving to someone in need.

    And honestly, churches having “problems” with people coming for help? I think our idea of church is rather different.

  18. Jac,
    Great thoughts. I think next week I’m going to present some more concrete ideas I’ve had of ways we might live in a radically different way.
    I fully support your goal of living in a community in a neighborhood that you might be able to serve and be a part of. If you haven’t read elsewhere on my blog, I live with my wife and 5 other adults and two kids in a neat neighborhood.

    Ruth,
    I’m sorry to hear that you’ve had or heard of such negative experiences with giving and people taking advantage of that giving. I think you’ll find as you continue to give and serve that not everyone is like that. I’d also challenge you that, yes, we shouldn’t feel obligated as Christians to care for the needs of other Christians, but we should do it, we absolutely should. And if you do it out of obligation, I think you’ll find joy will follow.

    This has been an amazingly good discussion. I’d love to keep it going. I’m maybe even thinking of podcasting it. I tell you what, if anyone out there has Skype and wants to have a discussion for a podcast, let me know.

  19. Ariah,

    I think it’s aweosme that you’re contemplating and discussing this issue so seriously. Like you, I wish more people in the Church were talking about and teaching on this as well. I wholeheartedly agree that more pastors and elders should be speaking up about the so- called “American Dream” and helping the Church to imagine more Christ-like alternatives.

    I really like the idea Jac gave, and also LOVE the idea of community- living with others and sharing the cost of renting or buying. That seems to be the *best* way, for so many different reasons.

    My husband and I are currently renting, and are not yet reay to set down our roots yet, so to speak, so I’m very interested in hearing more about what you and Mindy decide along your journey.

    Ohav Shalom,
    Jamie

  20. Great post, bub. The sooner you deep-six your debt, the better. Doing that leaves you with a lot less money risk, and a bunch of extra dough to help out other joes and jills, just like The Man Upstairs wants you to. Speaking of the Big Guy, thanks for working for him. Here’s looking at you, kid.

  21. About 5 years ago, it was placed on my heart that obtaining a mortgage was against the Word of God. But to say that to a fellow-Christian is like speaking a foreign language, even if you quote Scripture after Scripture. It’s just not something people (outside of OR inside of the church) are accustomed to considering. And when I bring it up, I’m met with the same, old, humanistic thought-processes: “It’s not debt, it’s an investment,” “You’re just throwing your money away when you rent, and you have nothing to show for it,” “You’re taking those Scripture verses out of context and they don’t apply to us today,” “But how can anyone today come up with $100,000 (or $400,000 depending on where you live) in cash?” “There are two things you’ll always have debt over: your car and your house,” etc., etc. It’s very frustrating.

    What’s wrong with buying something only when you have the money for it? What’s wrong with living your own lifetime in rentals with no debt or mortgage for the express intent of setting the standard of debt-free living for the generations that follow you? What’s wrong with teaching your kids at a VERY young age (like as toddlers/pre-schoolers) that you save your money so you can buy a house and a car when you grow up (BTW, that’s exactly what we’ve taught each of our 3 kids, now 14, 9, and 5)?

    Hubby and I are 37 and 34,respectively. We’ve been married for 14.5 years and have lived in a rental house for the last 12. Our home is happy and content. We’ve had cash over the years to bless others with that would have otherwise been sunk into our “investment.” It’s been good.

    But, alas, today – for the first time – Hubby put a bid on our first house. He knows where I stand on mortgage, and I know where he stands. May God protect us from the consequences of folly.

  22. Christi:
    Thanks for your comments and sharing your convictions.
    As you can read in some of my more recent posts, we’ve been trying to figure this out as well. Right now we are planning on buying a home too. We’ll be paying it off in a few years and in that way I feel like it’s a good opportunity on different levels. But I’ll be honest I’m still skeptical.

  23. Ariah,

    Well, we’re moved in to our new mortgaged-home. The biggest piece of peace that anyone could have ever given me was by a friend who told me, “Hey! That’s biblical!” when I told her our plan to have it paid off in just under seven years. Sure enough, it follows along in principle with Deuteronomy 15, though – of course – purposely going into debt is still (IMHO) strictly against God’s Word for God’s people. So, yeah, I like this house, and, yeah, I’m relieved to be purposely trying to follow Deut. 15 in this, but I’m still fearful of God’s judgment since we are still “boasting about tomorrow” and “returning to Egypt [bondage]” with this mortgage thing. But He knows my heart, and I trust that He is still sufficient for me in all things, even in His chastisement, should it come.

    BTW, thanks for the e-mail. It led me back here so I could give you an update. ^_^ God is good, all the time!

    Blessings to you!
    ~Christi

  24. Hi, Great post. My few thoughts are these: Romans 13 talks about paying dues, taxes and customs to whom it is due, but when it comes to debt, the original greek says 'owe no man any debt. Newer translations say 'pay off all your debts', which is not quite correct. So what does 'owe no man any debt' mean. Does it mean not to go into debt into the first place, or does 'owe' indicate you have not paid your debt at the due time??? I went to uni 13 years ago and God made it very clear to me not to get a student loan. He provided amazingly every step of the way, and despite my frustrations and fears about where the next dollar was going to come from, he always provided…last minute. So I think we go astray when we start discussing what is financially the best thing to do. If God has given you are conviction not to go into debt (like he has for us at the moment) then dont try to explain it in terms of financials, but in terms of conviction and faith. After I finished uni, with no debt, God called me to years of giving, and then to trust him getting through a serious heart attack etc. However, if you feel totally at peace about getting a mortgage, dont get hung up over it, but be aware that he could call you to give it all away, just to build your faith. That will be the real test of where your heart is at.

    Ryan

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