Editor,
I read with great interest the housing guide in Thursday's Daily Lobo. I completely agree that buying a home instead of renting is a financially sound decision that students should look into. I bought my first home near UNM seven years ago and have seen the value of the house more than double in that time - not a bad return for such a short period of time.
However, I feel as though the article failed to mention several key facts that students need to consider before buying a home. The article states that a $300,000 loan will run $1,800 a month. While this may be true, this does not take into account the taxes and insurance that you are also required to pay. When you figure in taxes and insurance on a $300,000 loan at 6.25 percent, your monthly payment is actually closer to $2,300 per month. Also, property taxes in the UNM area are some of the highest in the city and typically rise between 3 percent and 7 percent a year. As your house increases in value, your insurance will also rise to cover the market value of the home. So while you might pay $2,300 a month this year, don't expect to still be paying that amount in five or 10 years.
Finally, there is no way you can rent out a house to roommates and pay only a few hundred a month to own a home. Say you find a four-bedroom house - though most houses in the UNM area are two or three bedrooms - for $300,000 and rent three rooms at $500 a piece. You are still looking at $800 a month you must pay.
While home ownership is something I certainly encourage students to look into, it is not quite as easy or cheap as the article made it sound.
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Michael Farrington
UNM staff
