The House Update
Friday, February 29, 2008
.... and things continue to progress. I still have several small balls of stress throughout my body (currently; stomach, back, and neck) that are mostly attributed to money (or lack of).
We have a closing date. May 30th. The hope is that we can start moving before that, but if not, that will still give us two days. MW and I finally screwed our courage to the sticking point and went next door to speak with Nancy, our manager. I don't know why, but she has always intimidated us a little bit, and we were very worried that we would have to be out on our original date of April 30th. As it turns out, staying an extra month isn't a problem at all, so that's one less thing to stress about. It is probably for the best because it will give us that extra month to save, save, save.
...Which leads me into our financial situation. I mean,
dudes. We literally did all this in like.. two weeks. We're totally flying by the seat of our pants. I think regular people actually plan ahead, build a little nest egg and then start the slow process of home buying. But no. Not us. We were like "hey? What's on TV tonight?" "Nothing?" "Okay, wanna bye a house?". Seriously. That's pretty much how it happened.
People say that buying a home is so much better than renting. And one or two years from now, I might believe it. But right now, we need to come up with
minimum $4000 for all the closing costs, not including the deposit of $3000 we need to make on the house. By May 30th.
Breathe.
So, if we manage to overcome
that hurdle, we will now face our monthly payments. We haven't finalized the terms of the mortgage yet, but it will be comparable to what we've been paying in rent. But wait, there's more! Mortgage insurance, maintenance fees, etc, etc, etc. At the end of the day, we're looking at at least $200 dollars more than what we are paying in renting. And we haven't even heated the place yet.
Breathe.
Based on our incomes, we should manage it, but we are both essentially grounded from any spending for the next year or so. There will be a lot of sacrifices we'll both need to make for this to work. That'll be hard when our patio faces the liquor store.
7 came
7 Comments:
Yes. Breathe. And remember to opt for the bi-weekly payments for your mortgage.
Some good news, as far as heating goes, is that you're in a townhouse which means that you will save some money due to sharing a wall (or two walls) with other people. Maybe one of your neighbours will also have a wireless router that is unsecured and you can get the internet for free as well...
Also, it might take more than two years for you to be super stoked about home ownership and the money it costs. I found the statement I got on the first anniversary of my mortgage to be depressing because I had expected more of the principal to be paid off. No one told me that the first few years you own a house your mortgage payments are mostly just paying off interest.
That was really helpful, Megan. :)
So, why is bi-weekly better?
Yes, we expect to get away with less heat because we are sharing walls. We also face south, so we'll have the sun for a lot of the day.
I've been living on unsecured connections for the last two year, so I hope that can continue. :)
Bi-weekly is better because you pay less interest. I am not so great with math, but I believe the gist of it is that, even though you are not actually paying them more each month, you are returning their money to them at a faster rate and this makes them happy. I'm sure terms like "compound interest" and whatnot work into it somehow, but it is all Greek to me.
yes. you do end up making more payments each year, for the same reason you sometimes get paid 3 times in one month, which is awesome. your payments are usually a bit lower, but you don't pay more overall, which is nice.
I can't get that stupid mls # to work. Can you like, email me some top secret details or something?
There...I've caught up. I am so pleased for you and MW! This sounds very exciting! I have my fingers crossed that everything will work out perfectly.
As for payments, yup, we are also on accelerated bi-weekly for the reasons already explained.
~T
Because instead of making one payment a month for 12 months, you make one every two weeks for a year, which equals 26 payments, or the equivalent of 13!!! monthly payments, so like Sarah said, you get in one extra payment, which doesn't seem like much but can result in a considerable reduction in the length of time it takes you to pay off your mortgage and therefore, costs you less in interest (or borrowing costs).
But beware, like Sarah said, sometimes you get paid 3 times in one month, other times you have to pay your mortgage 3 times in one month and if your pay week and mortgage payment week are not coincident, the 3 mortgage month blows!
erin is so smart and stuff. I never thought of the words 'coincide" and 'coincident' as being related. funny. I'm the english major, she's the engineer.
you should be able to tell them what date to start the payments, within reason. like, next week, versus say, October, would be ok with most banks.
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