Mrs. Dragon and I are officially home owners! As I mentioned in previous posts, we were in the process of buying a house, and we closed earlier this month. To be clear, I am not someone who thinks that everyone should own their own home. In lots of cases, it may make more sense to rent.
However, we knew we were going to purchase a home in our new city (we moved here last summer for jobs). It was only a matter of when.
Neither of us have ever owned a home before, so we’ve never taken out a mortgage before. In case you haven’t heard, it’s a huge pain in the ass. In theory it’s a relatively simple thing. You want to buy a house, the bank gives you the money, and you use the property as collateral on the loan.
In practice, however, it is a well-oiled machine of cluster-fuckery. There were all sorts of last minute snags that were totally avoidable.
For instance, the bank sets up a secure online transfer so you can upload sensitive documents (pay stubs, W-2’s, etc). And, for some reason, there is no way to preview the documents after you upload them.
We uploaded all the documents they asked for 6 weeks before the closing date. Literally the day before closing they tell us that one of the documents didn’t load properly and we need to re-upload it in the next hour if we want to close on time. Ridiculous.
That’s just one example and I won’t bore you with all the details. The story does have a happy ending, we got the loan and only had to push our original closing date back by 3 days. Huzzah!
For all you voyeurs out there, here are the details on the house and mortgage:
- House size: 1066 sq ft
- 3 bedrooms, 2 bathrooms, closed-in 1-car garage
- Mortgage amount: $97,000
- Fixed-rate 30-year mortgage at 3.625%
I feel like owning your own home is a polarizing topic in the FIRE community. In general, choosing to buy a home is not a decision you should make lightly. You should also not let anyone tell you that you “should” or “need to” own a home. Whether or not it’s a good idea depends on a huge number of things. Here are some of the considerations we took into account when making our decision:
- It’s cheaper to buy than rent in our market. We would have to pay ~$1100/month to rent the place we are buying, but our principal, interest, insurance, and taxes are ~$700/month. The place we currently rent is $995/month.
- We plan on living in this area for at least the next 7-10 years, if not the next couple of decades, and rent has been rising a lot in the past few years.
- Interest rates are still really low. We got a plain-vanilla conventional 30-year fixed-rate mortgage at 3.625%. That’s pretty cheap money (and a lot of hyphens!).
- There are residential areas that are within walking/biking distance to both our jobs. Of course, we bought a home in one of those areas, which will translate to considerable transportation savings over the years.
- We plan on starting a family in the next few years. We’ve talked about it and want to own the house we raise our kids in.
These were the biggest motivators for us. Your personal situation might be quite different than what’s listed above, so please think long and hard before taking out a mortgage.
Anyway, we got the keys and all that’s left to do is a few small fixes and then we’ll be ready to move in. I have a passionate hatred for moving. It is the worst. I don’t really mind physically moving the stuff, but I loathe all that packing. Bleh. However, there is one really good thing about moving..
Moving is a great opportunity to downsize all your shit.
We’ve moved twice in the past three years, so our stuff is pretty lean right now. However, there’s always room for improvement.
For instance, just in the past couple months I’ve sold a weight bench, adjustable dumbbells, an extra guitar, and a busted TV on craigslist. I got $240 for the stuff but, more importantly, I no longer have all that stuff around the house.
If you’ve never tried getting rid of a bunch of stuff, you should. It’s very freeing. Surprisingly so. It also really opens your eyes to how much money you spend on stuff that you don’t really need. This is a topic that deserves a post all on its own. Maybe I’ll write one about all the stuff we get rid of before the move.
Photo credit: realtor.com