Blessed by the Potato

As soon as I heard that the mortgage brokers behind ratesupermarket were pushing a first time house buyer’s guide, I thought “I’m gonna hate that. Tearing it apart should make for a fun blog post.”

A novel idea was that you’d sign up for a 2-week guide that would send you one part of the lesson by email each day. Kind of gimmicky, why spread out 14 already-short pages over a full two weeks? Anyway, it’s short, there are cartoony graphics, and there are quizzes so it’s apparently aimed at getting the school-age crowd to buy homes.

Much to its credit, it does start the series off with the question of whether one should rent or buy. But of course, I have to take issue with the nonsense in the rent vs. buy comparison. They create a simple pro/con list for buying and renting. Unsurprisingly, they dig up the tired old half-truth “Money paid towards rent disappears forever” and stick it under the con column for renting. Yet under the pro column for buying is the flip side of that half-truth “Mortgage payments go towards your home’s equity” with no mention that interest also disappears forever.

“Restricting rules regarding guests, noise, pets, yard space, etc.” also appears as a con for renting, though most of that is not true (or applies equally to owners in condos or other situations with rules regarding noise, pets, etc.).

Even more strange though is this one: “Cosmetic renovations typically come out of your own pocket” as a con for renting. Huh? Whose pocket do they come out of for owners? For that matter, aside from Wayfare and I, who does renovations as a renter?

Considering the site is owned by mortgage brokers, who only make money when someone buys and takes out a mortgage, I was expecting it to be much more strongly biased towards rushing in to buy (e.g., to not even have a section on rent, and to focus more on stretching to get the maximum mortgage possible). The budgeting section didn’t stress that their calculations would give the upper end of affordability, but that was to be expected.

Interestingly, they have another rent vs buy table on their site. I’m not sure how I stumbled on it, but it’s not part of the cartoony first time buyer’s guide. It also looks to perhaps be a rough draft, since they get away with saying things like “Affordable: in some cities renting is the only option for people because of high housing prices; Low Risk: If house prices start to drop (as some people are predicting), you’ll be glad you didn’t buy” under renting pros, it’s not as nicely formatted, and has the common loose/lose mistake.