What is house bling? As it turns out, it’s an important question to ask.
For the purposes of this article, “house bling” is any trophy appliance with a 10-year useful lifespan and purchased as part of a 30-year new home mortgage for the privilege of paying interest on it for an additional two decades after it’s been discarded. Sound sadly familiar? It would be funny if it wasn’t the norm.
For example, an $8,000 Sub-Zero refrigerator added to the long-term mortgage can cost as much as a nice car by the time it’s paid for. In fact, within the 30-year term of a typical mortgage, it’s likely the original fancy fridge would be replaced at least once, while the mortgage payments are still paying off the first one. A $1000 refrigerator lessens the financial impact, but doesn’t change the odd reality of taking out a long-term mortgage on a short term thing.
Obviously, the same goes with high-end dishwashers, washer/dryers, and built-in home entertainment and security systems—short lived stuff. And when this stuff isn’t new, it gets even worse. Used appliances in previously-owned homes may be shorter-lived than a dime-store goldfish.
Not that there’s anything wrong with high end, high-quality appliances. Reliability, functionality, and energy efficiency can often justify their expense. In fact, it is these very qualities that will inevitably render your older appliances obsolete: and that’s partially the point. But all this begs the question, why would we take out long-term loans on short-term stuff?
The answer with existing homes—new or old—is you have no choice. They come pre-packaged and their short-term stuff is inseparable from the loan. With new homes, especially custom new homes, however, there are options.
A well-built home shell can last for a century or two, so a long-term mortgage on it makes sense. After all, we all need shelter and sanctuary and most of us cannot afford to prepay for a lifetime of both. Likewise, we also need HVAC systems and fixtures that keep us comfortable and healthy. And though it’s true that the siding may last only a half-century or so, the roof, a quarter century, and the finishes, a decade—all is necessary to protect our most important investment. But most mortgages, as we’ve seen, cover not only the longer-term necessities, but the bling as well; so if we buy an existing home, we’re pretty much stuck.
If, on the other hand, we decide to build a custom home and desire high end appliances, there is always the option to pay for them in full, upfront, separate from the construction loan and conventional mortgage—or down the road as our finances permit. They will still only last a decade or so, but at least we won’t be paying 15, 20, or 30 years interest on them. And the added benefit to building a new home is that we also get a new HVAC system, a new roof, new siding, new fixtures, new wiring, new plumbing and a home built to current energy code—or better.
Being a high performance home builder, we often see prospects struggling to reconcile their wish list of amenities (including house bling) with their desire for energy efficiency, or added space like a finished basement, an extra bedroom, or a garage—all on a budget that forces them to make tough choices. While there is no formula for this, we think it’s advisable to take the long view. A high quality, high performance building shell can provide health, comfort, and extremely low operational costs; these benefits will pay dividends for many decades into the future and, unlike bling, long outlast your long-term investment.