Dear Roger,
My husband and I are planning to buy a house. Are there biblical guidelines for house buying? If so, could you please share them with us?
We would also appreciate any advice you could give.
Sincerely, Kimberly and Don.
Dear Kimberly and Don,
When I began studying the subject of the Bible and houses I was surprised to see that the Bible has a lot to say about the subject.
I attended my first biblical finances seminar when I was twenty-years old. Forty-five years later Julie and I are still living by those financial principles. I long ago forgot the name of the man who set forth for us these principles; but, Julie and I owe him a tremendous debt. He changed our lives for the better, forever. I hope that these guidelines are helpful for you, too.
Let me give you an example.
By following good biblical economics God has kept his financial promises to us and we have never lacked for anything.
Our first daughter, Jesse, was born to die. Her chromosome confusion doomed her to an early grave. Forty days in the neonatal section of the hospital plus all the attending doctors, tests and medicines produced an astronomical financial bill. Fortunately, we had medical insurance which paid for everything except for $11,000. We didn’t have $11,000. We didn’t have anything. It was my first year pastoring in Tucson and finances were tight.
In fact, the church agreed to pay me a salary of $1,000 per month. However, when we arrived the head deacon told me that they had changed their minds and could only afford $900 per month. I got a $100 cut in salary before I ever preached my first sermon.)
The night Jesse was born, our obstetrician, out of the goodness of his heart, cut his bill in half.
The church took up an offering and other friends and neighbors donated to help us reduce the debt. Then, Merle invited me to lunch at the local Village Inn Restaurant. After we were seated he asked me how much more money we needed to completely pay off the debt. Frankly, I was embarrassed by his request. But he insisted. Finally I said, “We are still $1800 short.”
He reached in his coat pocket, pulled out his checkbook and wrote a check to me for $1800. I protested; I felt very uncomfortable taking his money; but, he kept on insisting. Finally, with great gratitude of heart and many “thank yous,” I reached out and took the check. Then, he held open his checkbook and put it right to my face while saying, “If you have any more bills come in, they are mine.”
I knew then, and still believe, that because Julie and I were following God’s financial plan, He met our needs to the very dollar.
Several very practical ministries have grown up around the idea of how to handle our money in a Christian way. One of the best resources is Larry Burkett’s “Crown Ministries”. Check out some of the terrific Internet resources on how to handle God’s money effectively.
Let me share with you some things to keep in mind from a biblical perspective when you are thinking about purchasing a house.
1. BIBLICAL ECONOMICS BEGINS WITH GOD’S PROMISE THAT IF WE GIVE HIM THE TOP PORTION OF OUR INCOME, HE WILL MEET OUR FINANCIAL NEEDS.
The first portion of our income is called the “tithe” (10%) which is validated by Jesus in Luke 11:42.
I’m convinced that the reason many Christians struggle in financial bondage is because they refuse to follow this first step in a godly financial plan.
“Will a mere mortal rob God? Yet you rob me.
“But you ask, ‘How are we robbing you?’
“In tithes and offerings. You are under a curse—your whole nation—because you are robbing me. Bring the whole tithe into the storehouse, that there may be food in my house,” says the Lord Almighty, “trust me in this and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it” (Malachi 3:8-10).
This is the only verse in the Bible where God invites us to trust Him. This is really important.
2. REFUSE TO BE SEDUCED BY MATERIALISM AND STATUS SYMBOLS.
Psalm 49 is the Psalm of the rich materialist. God is warning us that if we’re overawed by someone else’s house, envious of it, or attracted to it, we are in danger of falling into the trap of materialism.
The most universal, time-tested, status symbol in human history is the house. The house is not the only status symbol in society. Cars, clothes, jewelry, club memberships, and suntans would be a partial list of others.
It’s no surprise that when God wants to teach us the danger of seeking after status symbols in Psalm 49, He would use the house as an illustration.
God never teaches that a big house is proof that the occupants are materialists. After all, there are many very rich and righteous people in the Bible – like Abraham and Joseph.
The result of materialism and status seeking is often misery and despair (Ecclesiastes 2:4-11). This is especially true when we buy more house than we can afford.
“But godliness with contentment is great gain. For we brought nothing into the world, and we can take nothing out of it. But if we have food and clothing, we will be content with that. Those who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge people into ruin and destruction. For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs” (1 Timothy 6: 6-10).
3. HOUSES AREN’T THE PRIORITY THAT WE THINK THEY ARE.
Paul defined contentment in 1 Timothy 6:8: “If we have food and clothes we will be content with that.” There is no mention of houses.
There are entire cultures in our world where practically no one owns a house. In many countries four or five families live in a house smaller than one American house. I’ve seen it.
4. BEGIN YOUR FINANCIAL PLANNING ON THE BASIS OF YOUR FINANCIAL RESOURCES, NOT YOUR DESIRES.
Don’t ask: “What do I want? What does the world say that I should have? What does my peer group say that I should have? What is fashionable?”
Instead, ask questions: “What resources do we have? What can I do with the resources that I have? What buying power do I have? What earning power do I have? How does God want me to use it?”
“Keep your lives free from the love of money and be content with
what you have, because God has said,
“Never will I leave you;
never will I forsake you” (Hebrews 13:5).
“Keep your lives free from the love of money…” These are our desires. Stop thinking materialistically.
“And be content with what you have…” These are our resources.
“Because God has said, ‘Never will I leave you, never will I forsake you’.”
God says, “I will give to you the right amount of resources; you will use these according to my will. It is that simple. You be content with what I have given to you.”
When we take this approach we allocate our resources rather than attempt to pay for our desires. If we go through life attempting to pay for our desires, we will ultimately crash and burn.
5. HOW MUCH MONEY CAN I SPEND ON A HOUSE?
“Put your outdoor work in order and get your fields ready; after that, build your house” (Proverbs 24:27).
The context here is a farming society; however, this principle is just as applicable to our society today as it was to theirs then.
Let me give to you a rule of thumb used by most financial planners to give you an idea of an approximate amount that you can afford to spend on your house.
The average realtor will examine your annual salary and say that you can safely spend 30 to 35% of your annual income on a mortgage for your house. In some cases it’s possible to go as high as 40%. But that’s pushing it.
The only problem is that your realtor has not factored in God. Getting our fields ready means that we take a closer look at how much we are really going to need.
Let me share with you some of the things to keep in mind from a biblical perspective when you are thinking about purchasing a house.
Oh, by the way, recognize that the realtor is really working for the seller and not for the buyer. This means that the more money that you spend to buy a house the more money the realtor will make. Don’t forget to check the tax rolls to get some sort of an idea of what your prospective house might really be worth.
Most Christian financial planners work with a term called “Net Spendable Income.”
Take your gross income per month and subtract three things from it. God’s part… the government’s part… savings… What is left we can define as our Net Spendable Income.
.
For simplicity’s sake, let’s illustrate and use 33%. Let’s say your gross income is $36,000 per year, or $3,000 per month.
God’s part =10% or $300. Leaving $2700.
Government’s part = 20% or $600 . Leaving $2100.
Savings = $300. Leaving $1800.
$1800 x 33% = $600 per month to spend on housing if you make $36,000 per year.
Let’s not forget that too many families struggle by with an income of $36,000 per year or less.
Now, let’s go to a higher figure and say that your gross income per year is $120,000, or $10,000 per month.
God’s part = 10% or $1,000. Leaving $9,000.
Government’s part = 30% or $3,000. Leaving $6,000.
Savings = 10% or $1,000. Leaving $5,000.
$5,000 x 33% = $1,650 per month to spend on housing if you make $120,000 per year.
Of course, we recognize that we may not have much of a house by following this rule. But by following this rule, we remain faithful to the principle of allocating resources rather than trying to pay for our desires. In this way, we have a financial plan that is designed by God for solid success.
If we go out and find the house we desire and then try to pay for it, we are going to fail. We have to allocate resources. Remember that 95% of divorcees say that finances were a major cause in their divorce.
Is it all right to have a mortgage? The Bible teaches that it is all right to borrow money on an appreciating asset. It is not all right to go into debt for depreciating items like cars and refrigerators. A house can be a great asset and a marvelous investment. But remember, houses can go up and down in value.
There are many scenarios in today’s economy where renting a house is a much wiser decision than buying a house.
And we are not throwing our money away by renting.
We are getting value received when we rent. We are getting a place to live and we get the total flexibility to walk out of it clean at any time without a mortgage hanging around our necks. We are free of the worry of maintenance, insurance, and taxes.
And, we have gotten rid of the risk that the property will go down in value.
Biblical economics helps us to reach healthy financial goals. One goal is to own our house debt-free before we retire.
When Julie and I first married we lived in a rented, one-bedroom, apartment with a grand piano in the living room. Julie taught over 50 piano students each week to help us survive financially.
From that inauspicious beginning, as we move into our retirement years, Julie and I now own our house debt-free. The feeling is great; the security is even greater. Paying off the house mortgage is a major step in good biblical economics.
6. PROVERBS 24:27 PROVIDES THE GUIDELINE WHICH PREPARES US TO BUY A HOUSE: “FINISH YOUR OUTDOOR WORK AND GET YOUR FIELDS READY; AFTER THAT, BUILD YOUR HOUSE.”
Let me show you what, “finishing our outdoor work and getting our fields ready,” involves. Only when the work is done and the fields are ready is it time to buy a house
Number One: We Are Paying The Lord His Proper Share Of Our Income.
Number Two: We Are Paying The Government Taxes According To The Law.
Number Three: We Are Out Of Debt For All Depreciating Items.
Number Four: We Are Saving A Portion Of Our Income For The Future.
This includes an Emergency Fund that is set aside to cover our unpredictable (as well as predictable) future needs. Many economists say that our emergency fund should be somewhere between three to six times our monthly gross income.
Number Five: We Have A Positive Cash Flow.
A positive cash flow means that we are taking in every month more money than we are spending. Every month we pay all our bills and there is something left.
If we will follow these principles, then we will discover that we are Biblically allocating our resources rather than having to pay for our desires.
I am convinced that if we begin to commit ourselves to follow God’s Biblical principles we will be delighted to see that God just might start doing some things that we could never do with the resources that we have.
May God bless you, Kimberly and Don, with great wisdom as you make one of the biggest financial decisions of your lives. May God make His will so clear to you that you can’t miss it.
Sincerely, Ask Roger