Wisdom-Trek / Creating a Legacy
Welcome to Day 733 of our Wisdom-Trek, and thank you for joining me.
This is Guthrie Chamberlain, Your Guide to Wisdom
Home Sweet Home - Ask Gramps

Thank you for joining us for our 5 days per week, wisdom and legacy building podcast. This is Day 733 of our Trek time for our Philosophy Friday series.  Each Friday we will ponder some of the basic truths and mysteries of life, and how they can impact us in creating our living legacy.  As we continue on this trek called life sometimes we have questions about life so our Friday trek is a time where we can ‘Ask Gramps.’   Gramps will answer questions that you would like to ask your dad or granddad, but for whatever reason, this is not possible.  No matter how old you are, I know that all of us would like the opportunity to ask dad or gramps questions about life in many areas.  We will address areas such as finances, relationships, health/fitness, business/work, home repairs/renovations, seasons of life, spiritual/Biblical questions, and any others areas that come our way.  As your fellow sojourner and mentor on this trek that we call life, it is my goal to provide you with practical wisdom and advice about any area of life. It is crucial that I receive a constant flow of questions so please submit your questions to guthrie@wisdom-trek.com, or send me a message at the bottom of any page on wisdom-trek.com or text me at 740.350.5732 and I will answer your questions on our Friday podcast.  I hope that this will become a highly interactive and informative time.

We are broadcasting from our studio at ‘The Big House’ in Marietta, Ohio.  When this episode is originally released, I will be in Mesa AZ working with our partners on Phase II of the Mesa Townhome project.  We are the General Contractor for the funding group that is having the homes built, so we are able to see the progress from breaking ground through the final sale of the home.  So I thought it would be appropriate to answer a question about home buying today.



Hey Gramps, “We are looking to buy a home, should I apply for 15 or 30 year mortgage?”
Home Sweet Home
Regardless of whether you are a first time home buyer, or looking to move to a new home, the same principles should apply.  Let me share some background thoughts first, before answering the question, because they are so crucial to your decision.

First off is to make sure that you do not look to buy more of a home than you need.  It is not necessary to buy a home with four bedrooms and 4 bathrooms for a family of four, especially if your budget will make it very tight.  It is nice to have spare rooms for company and other purposes, but the fact is if you have to pay several hundred dollars more per month for a larger home then it may not be a wise investment.

Second, do you have adequate reserves for a down payment?  Most lending institutions require 10-20% down, and that money is not supposed to be borrowed from any other sources, including family. If you are able to purchase a home that appraises for 20% higher than the selling price, sometimes the down payment is waived. If you do not have an adequate down payment, it would be best to wait until you do. There is also several hundred or thousands of dollars in closing fees that need to be considered. Never use up all of your reserves to make a down payment, leave at least 1 to 2 months of income in an emergency fund.  Unexpected expenses happen to all of us.If you have credit card debt or significant student loans, use your reserves to pay those off before investing into a home. The only exception is if the student loan interest rates are very low, which is not the case in most instances. The actual interest paid on credit card bills is usually much higher than what is stated.  Especially if you are only making minimum payments.