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Emotional real estate

June 23rd, 2013 at 02:30 pm

As I’ve mentioned, my DH and I are in the process of buying our first home. We’ve been saving for a down payment ever since we were married and living in the same place. We finally reached the point where we felt secure in our jobs/location for the long-term, and so we decided to pull the trigger.

When we started looking, we narrowed our focus into a particular neighborhood based on community feel, type/cost of home, and quality of the local schools. But we were willing to consider homes in a couple of other (more expensive) neighborhoods as well. We set a range for our budget, based on available down-payment funds, and started looking at homes.

And then we found my dream home. Like my forever dream home. I walked inside and I knew. It was perfect. It was a cute Dutch colonial, my favorite style of home. It was immaculate on the inside; it had been completely gutted and modernized by someone who clearly knew what they were doing and put great care into the work. It was also at the very, very top of our price range.

My DH had doubts, but I reasoned them all away. I was in love, and I wanted that house. So we wrote an offer the very same day. I was sure someone was going to steal the house away. But DH insisted that we sleep on it before submitting it. The next day, removed from the proximity of the house, we talked it through again. It wasn’t in the right neighborhood; in fact it was a little isolated from other houses. It wasn’t walking distance to the school or to any playgrounds/parks. There was no evidence that any children lived nearby at all. Who would DS play with? Although the *house* was perfect, clearly the location was not. And by buying at the top of our range, we would be tying up more money in our home and limiting choices in the future. We decided not to make the offer after all.

Instead, we refocused on our original choice for a neighborhood, and found the home we are currently under contract for. It is a little bit smaller, and it needs a little work, but I really love it. It is two blocks from a playground and walking distance to the elementary school. There’s a big backyard for DS to run around in, and the neighborhood is packed with kids. And it is at the very bottom of our price range.

The best news is that the other house, the dream house, is still on the market. The sellers have lowered the price twice. And to think I was worried someone would steal it away! I think that generally I have a pretty good head on my financial shoulders, but in this situation I am so grateful that my better half (DH) was there.

Playing with numbers

June 22nd, 2013 at 02:33 pm

I like to try various scenarios in a mortgage calculator, just to see what happens. I know, I'm a nerd, but I don't think I'm the only one on this site.

Given current information about our tentative mortgage:

(1) If we pay exactly the mortgage payment every month, and no more, it would be payed off on August 1, 2043, and we would have paid a whopping $197,371.80 in interest over the life of the loan.

(2) If we could pay an extra $330 a month toward the principle (no pre-payment penalties allowed in our state), we would pay if off on August 1, 2033, and only pay $123,891.33 in interest.

(3) If we could pay an extra $555 a month toward the principle, we would pay it off on December 1, 2029, and would only pay $99,430.18 in interest. This option is nice because our very first payment would be essentially split between principle and interest, and we would never have a payment where we paid more in interest than in principle!

Now, realistically, finding an extra $555 to put to the mortgage every month may not be reasonable, but it's still nice to see what the numbers are in different situations. However, I do think an extra $330 a month might be possible. Most likely, though, I will try to pay at least a little extra every month for now, and then once DS (and possible future DKs) are out of childcare we will have more to send to principle.

I will make $330 a month my tentative goal, and re-evaluate once I see whether it will be possible.

Also, when someone on this site used to post their extra principle payments, then used to include a table that showed which future payments had been eliminated by their mortgage chips. Is there an easy way to do this? I always thought that chart was pretty cool!

A mountain of boxes

June 21st, 2013 at 03:17 am

Thanks, everyone, for the warm welcome. And so much good advice already!

Right now we are in the midst of packing up our current residence. Although we won't close until the end of next month, we have to be out of our current place by the end of this month, since our landlord is selling our house. We've got some plans for furnished temporary housing to bridge the gap, but in the meantime we need to pack all of our stuff for storage.

By starting packing so early, I am trying to be deliberate about getting rid of things that we don't need/use. We've been in the same house for four years, and we've accumulated a lot of stuff. (We've also had a kid since we moved here, and that sure brought lots of stuff into our lives!)

Every day this week I have made a run to Goodwill/trash/recycling center. Once I've decided it can go, I just want it out of the house! We've made a lot of progress, but there's still quite a bit to go.

Financially, though, I am ashamed to say that during this process I've found multiple things that I've purchased from Amazon that are STILL IN THE BOX! Like still in the brown shipping box. We have a subscription to Amazon Prime, and sometimes it is just too easy to buy something I think we need. Well, clearly we didn't really need it if it is still in the box!

The good news is, that some of the purchases were still eligible for return, so I filled out the necessary info and will mail them off tomorrow. Another item will make a good birthday gift for my nephew next month. The remaining few items I will chalk up to a learning experience and vow to change my ways!

Have a good night, everyone!

***Edited for grammatical errors.

Getting started

June 20th, 2013 at 01:57 am

Hi, everybody! I'm a long-time lurker on this site, but new to the world of blogging. Mostly because I never really felt like I had anything interesting to say!

My DH and I are about to buy our first home, however, and I thought I could use this blog to track my goals for the mortgage. I plan to pay extra on the mortgage each month, with the goal of paying off the 30-year note within 20 years.

I may be getting a little ahead of myself, because we haven't even closed on the house yet! We should do so at the end of July, so I guess our first mortgage payment should be due August 1st. The big deal for us is that this payment will be a good deal lower than what we have been paying in rent for the past four years. I hope that I can send at least some of the difference to principle each month!

That's all for now, but I'll share more info in the future. Looking forward to being a part of Saving Advice!