So I put in the offer on Thursday for $255,000 and they pay $5,000 for closing. They countered on Friday with $260,000 and they pay $5,000 for closing. After much thought, I accepted. I was worried that the house would get some traffic over the weekend and I could lose my edge.
So I'm thismuchcloser to being a homeowner. Crazy.
The inspection was this morning and everything checked out okay. There were some minor things, but with a home this old (built in 1939), that's to be expected. I'm waiting on the final report and the radon test to see what we should ask the seller to fix.
So I still have to finalize the mortgage. I've gotten good faith estimates (GFE) from 2 banks, but haven't formally applied for any mortgages yet. If all goes well, closing will be December 2. Let's see what happens...
There were a few additional questions asked that I will get to this week. I just wanted to give you all the update.
Today I'm grateful for: some me time
Sunday, October 30, 2011
Thursday, October 27, 2011
More Condo
There would some good questions on my last post. And since I made an offer (!) on the condo this morning, I figured I should go into more detail in what may seem on the outside to be a spontaneous and maybe not so financially smart move.
Jessie asked:
Do you have your 20-30% down payment already?
I've always been told not to buy unless you plan on living there for at least five years b/c you pay the most interest in the first few years so your equity gains are quite small - is that something you're worried about?
You guys have seen my net worth. It's at the place where I definitely feel I can afford to put a significant amount down. I always had the thought that when my net worth reached 100K that I would start to look for a place, but when I got to that point, I didn't feel ready yet. However, I feel like I'm at a different place right now. I have the money to be able to put at least 20% down, but I'm not going to. See, whenever I would talk about want a condo, my parents would always say that they would help. I never knew how much they were willing to offer until I got to the point where I felt really serious. Guys, they're willing to pay up to $100,000. I know I'm really lucky that my parents are in the financial place to be able to help so much. And before everyone gets all hot and bothered, the way they see it, is that money will be coming to me at some point anyway (once they're gone), so I might as well get to use it now when it can really help me.
I'm not worried about the equity gains being small. I feel like this house is significantly undervalued and once it is updated, it can either be rented or sold for a profit. My monthly home payment isn't going to increase significantly and once Mr. Cupcake moves in, everything will decrease significantly. Maybe we'll even pay a bit more towards the mortgage then, who knows? I'm seeing this as a long term house flipping situation. I/we will live there for awhile and slowly fix it up and wait for the market to right itself.
Leigh asked:
How much of a down payment do you have? Where will the funds come from for doing all of the renovations that you want to do? Do you need to run these by the HOA before starting anything?
With the amount that you need to put into it, could you actually sell it for a profit in a few years?
How much will you need to spend out of your emergency fund? What if it takes you awhile to find a new job and you don't end up staying at this one? You don't even seem to really like it that much.
Do you want your parents to help? I know that I am personally waiting to buy a condo until I don't need my parents' help at all.
I'm probably going to put about $100,000 down, that will make my mortgage payments very reasonable. That money will come from my parents and then all of the renovation costs will come from me and my savings. I can't really fix anything on the exterior, but the interior is all mine. The condo association isn't responsible for what happens inside my place.
Yes, the house needs a lot of renovations, but since it's teeny, it shouldn't be so expensive. I think it could look really, really nice for less than $20,000. I'm going to go the cheap(er) route, Ikea or used cabinets, etc. It is significantly undervalued because the interior is so awful looking right now.
Renovations will be be a slow and steady process, so I'll be able to use some of my money for that, while building back up savings and saving for the next phase of renovations. I still think that I have enough in savings to make all of these things happen.
I do want and appreciate my parent's help. They are good people and I know it won't turn into a fight for control. It's definitely NOT going to be "we bought you this house, so you should XYZ." It's like I said above, the way they see it is that the money is going to my sister and I eventually, we might as well have it to use while we need it. When they eventually pass away, they hope that we will be in a financial place where the money won't make as much of a difference. Now that money can really help us.
Got more questions? Ask away!
Today I'm grateful for: working from home to avoid traffic
Jessie asked:
Do you have your 20-30% down payment already?
I've always been told not to buy unless you plan on living there for at least five years b/c you pay the most interest in the first few years so your equity gains are quite small - is that something you're worried about?
You guys have seen my net worth. It's at the place where I definitely feel I can afford to put a significant amount down. I always had the thought that when my net worth reached 100K that I would start to look for a place, but when I got to that point, I didn't feel ready yet. However, I feel like I'm at a different place right now. I have the money to be able to put at least 20% down, but I'm not going to. See, whenever I would talk about want a condo, my parents would always say that they would help. I never knew how much they were willing to offer until I got to the point where I felt really serious. Guys, they're willing to pay up to $100,000. I know I'm really lucky that my parents are in the financial place to be able to help so much. And before everyone gets all hot and bothered, the way they see it, is that money will be coming to me at some point anyway (once they're gone), so I might as well get to use it now when it can really help me.
I'm not worried about the equity gains being small. I feel like this house is significantly undervalued and once it is updated, it can either be rented or sold for a profit. My monthly home payment isn't going to increase significantly and once Mr. Cupcake moves in, everything will decrease significantly. Maybe we'll even pay a bit more towards the mortgage then, who knows? I'm seeing this as a long term house flipping situation. I/we will live there for awhile and slowly fix it up and wait for the market to right itself.
Leigh asked:
How much of a down payment do you have? Where will the funds come from for doing all of the renovations that you want to do? Do you need to run these by the HOA before starting anything?
With the amount that you need to put into it, could you actually sell it for a profit in a few years?
How much will you need to spend out of your emergency fund? What if it takes you awhile to find a new job and you don't end up staying at this one? You don't even seem to really like it that much.
Do you want your parents to help? I know that I am personally waiting to buy a condo until I don't need my parents' help at all.
I'm probably going to put about $100,000 down, that will make my mortgage payments very reasonable. That money will come from my parents and then all of the renovation costs will come from me and my savings. I can't really fix anything on the exterior, but the interior is all mine. The condo association isn't responsible for what happens inside my place.
Yes, the house needs a lot of renovations, but since it's teeny, it shouldn't be so expensive. I think it could look really, really nice for less than $20,000. I'm going to go the cheap(er) route, Ikea or used cabinets, etc. It is significantly undervalued because the interior is so awful looking right now.
Renovations will be be a slow and steady process, so I'll be able to use some of my money for that, while building back up savings and saving for the next phase of renovations. I still think that I have enough in savings to make all of these things happen.
I do want and appreciate my parent's help. They are good people and I know it won't turn into a fight for control. It's definitely NOT going to be "we bought you this house, so you should XYZ." It's like I said above, the way they see it is that the money is going to my sister and I eventually, we might as well have it to use while we need it. When they eventually pass away, they hope that we will be in a financial place where the money won't make as much of a difference. Now that money can really help us.
Got more questions? Ask away!
Today I'm grateful for: working from home to avoid traffic
Wednesday, October 26, 2011
Condo?
Holy crap. I could buy a condo. I'm doing the math and it could work out. The place is listed at $260,000. Hopefully I'll get it for $250,000ish. Condo fees are $230/month. Taxes average to about $230/month also. And if I put 20-30% down, the monthly payments could be in the range of $900. However, that's $460 more in housing expenses than I currently have. I'm pretty sure I can afford it right now. And I can definitely afford it when Mr. Cupcake moves in. But the job situation is only steady until December for sure or March if I'm lucky. My parents will help (and I know I'm lucky for that), but I want to do as much as I can on my own.
The house needs major updates. The kitchen and bathroom need to be totally gutted. It needs to have a washer/dryer added. It needs to be painted. I'm feeling like I could be hemorrhaging money for awhile.
But I think this could be a good long term investment. Condos of this size are renting for more than my mortgage would be. And once it's updated all pretty, it will be worth more. I (and eventually Mr. Cupcake) could live there for 2-3 years, build some equity, save some money and eventually rent it out or sell it for a profit. I think once it is updated, it will be nice. It has good bones and is in a good neighborhood.
Cutting all spending starts now. No new clothes. Minimal eating out. No new anything.
Today I'm grateful for: my dad's advice
The house needs major updates. The kitchen and bathroom need to be totally gutted. It needs to have a washer/dryer added. It needs to be painted. I'm feeling like I could be hemorrhaging money for awhile.
But I think this could be a good long term investment. Condos of this size are renting for more than my mortgage would be. And once it's updated all pretty, it will be worth more. I (and eventually Mr. Cupcake) could live there for 2-3 years, build some equity, save some money and eventually rent it out or sell it for a profit. I think once it is updated, it will be nice. It has good bones and is in a good neighborhood.
Cutting all spending starts now. No new clothes. Minimal eating out. No new anything.
Today I'm grateful for: my dad's advice
Monday, October 24, 2011
+/- update
(-) My apartment has mice. It's so icky that I have no words to discuss it. I'm genuinely terrified to live there. My landlord is taking care of it, but I still had to trap the mouse I found looking at me from the bathtub when I was brushing my teeth. And I still have to check the traps to see if they've caught anything. So icky.
(+) This one fact has renewed my search for a condo. I thought that when I hit that 100K net worth, I would start looking, but I wasn't ready. I feel like the mice are a sign from the universe that it's time to do just that.
(+) And the search for a condo is leading to some big conversations with Mr. Cupcake. Guys, we're talking marriage. I know, right?
(+) I found a condo I'm interested in. It's terrible. And that's amazing. The kitchen and bathroom need to be redone. A wall needs to be removed. A washer/dryer needs to be added. Maybe some shelves knocked down and a closet expanded. But it has good bones. In a good neighborhood. And I think the price is right. I think I could live there for awhile, have Mr. Cupcake move in, then either sell it and move up in the world or keep it as a rental property.
(+) I've gotten preliminary pre-approval for a mortgage. They're willing to lend me $300,000 which is more than the value of this place. And I found out that I have A+ credit. The mortgage guy said it was the highest he's seen in awhile. The middle score was 801. I'm feeling really proud :)
(+) Things are starting well with Mr. Cupcake's financial turnaround. He's on mint.com now and he's been playing around with it a lot. I think he's starting to see the PF light. I know it takes time for lasting change in that area, but this is a major first step. He'd never tracked his spending before and I know this is giving him an opportunity to think about things that he hasn't before. He's making long term financial goals, and that is totally sexy.
(+/-) I'm still not in love with my temp job. I'm loving the bump in the paycheck and they now have approval to keep me around at least December and want me to stay until at least March. I have got to start looking more seriously at jobs, especially with the potential new expense on the horizon.
Today I'm grateful for: a good, good life.
(+) This one fact has renewed my search for a condo. I thought that when I hit that 100K net worth, I would start looking, but I wasn't ready. I feel like the mice are a sign from the universe that it's time to do just that.
(+) And the search for a condo is leading to some big conversations with Mr. Cupcake. Guys, we're talking marriage. I know, right?
(+) I found a condo I'm interested in. It's terrible. And that's amazing. The kitchen and bathroom need to be redone. A wall needs to be removed. A washer/dryer needs to be added. Maybe some shelves knocked down and a closet expanded. But it has good bones. In a good neighborhood. And I think the price is right. I think I could live there for awhile, have Mr. Cupcake move in, then either sell it and move up in the world or keep it as a rental property.
(+) I've gotten preliminary pre-approval for a mortgage. They're willing to lend me $300,000 which is more than the value of this place. And I found out that I have A+ credit. The mortgage guy said it was the highest he's seen in awhile. The middle score was 801. I'm feeling really proud :)
(+) Things are starting well with Mr. Cupcake's financial turnaround. He's on mint.com now and he's been playing around with it a lot. I think he's starting to see the PF light. I know it takes time for lasting change in that area, but this is a major first step. He'd never tracked his spending before and I know this is giving him an opportunity to think about things that he hasn't before. He's making long term financial goals, and that is totally sexy.
(+/-) I'm still not in love with my temp job. I'm loving the bump in the paycheck and they now have approval to keep me around at least December and want me to stay until at least March. I have got to start looking more seriously at jobs, especially with the potential new expense on the horizon.
Today I'm grateful for: a good, good life.
Wednesday, October 5, 2011
The Talk
Mr. Cupcake and I finally talked about his finances and it is not as bad as I worried. Phew! I'm so used to this PF world where some of you are paying off tens of thousands of dollars in credit card debt (which I have SO much respect for you for doing!) that when he said that he had less than $3,000 of credit card debt, I breathed a gigantic sigh of relief. Sure, he still has student loans, but I'm not as worried about those right now.
Less than $3,000 on his credit cards? We can totally get rid of that fast once he has a budget. And he's going to let me help him make a budget. I can't even tell you how excited I am. My inner-PF nerd practically peed herself with excitement.
I know that I can be intense and have a one-track sort of focus when it comes to finances, so I'd love some advice about how you saw the PF light, especially if it was a struggle for you. I'm worried that he doesn't realize the "latte effect" and how those small purchases add up really fast. I want this to be easy for him because I know he will get overwhelmed if I give too much info at once. But I still want him to see the light and that getting rid of this debt is possible to do fast. I'm thinking that the least scary thing for him would be to use mint.com to track his spending and get a sense of where all of his money is going.
Here's my thought process: have him write down all of his fixed expenses for the month (rent, car loans, gym membership, student loan payment) and how much he thinks he spends in other categories. Then we'd input all the data to mint.com to see how it really stacks up. What do you think?
Today I'm grateful for: helping Mr. Cupcake take positive steps for himself and also for us.
Less than $3,000 on his credit cards? We can totally get rid of that fast once he has a budget. And he's going to let me help him make a budget. I can't even tell you how excited I am. My inner-PF nerd practically peed herself with excitement.
I know that I can be intense and have a one-track sort of focus when it comes to finances, so I'd love some advice about how you saw the PF light, especially if it was a struggle for you. I'm worried that he doesn't realize the "latte effect" and how those small purchases add up really fast. I want this to be easy for him because I know he will get overwhelmed if I give too much info at once. But I still want him to see the light and that getting rid of this debt is possible to do fast. I'm thinking that the least scary thing for him would be to use mint.com to track his spending and get a sense of where all of his money is going.
Here's my thought process: have him write down all of his fixed expenses for the month (rent, car loans, gym membership, student loan payment) and how much he thinks he spends in other categories. Then we'd input all the data to mint.com to see how it really stacks up. What do you think?
Today I'm grateful for: helping Mr. Cupcake take positive steps for himself and also for us.
Sunday, October 2, 2011
Last Day Net Worth: September
Despite earning a paycheck during the month of September for the first time in awhile, I'm still down this month. Lame.
Liquid Assets
Cash (checking, MMA, W2S): $31,266.43
GNMA: $19,456.75
Total Bond Index: $19,656.71
Total Stock Index: $25,625.89
Total Liquid: $96,005.78
Percent Change: -1.66%
Retirement Assets
Roth IRA (Target 2045): $5,513.12
403(b) (S&P 500 Index): $18,641.69
Total Retirement: $24,154.81
Percent Change: -6.92%
Total Net Worth: $120,160.59
Percent Change: -2.76%
I'm basically at the same point right now as I was in December of last year between the combination of no real income for 2ish months and the tanking stock market. I'm still in the 6 figure club, but I'm a little concerned that my net worth did not increase at all this month with my increased paycheck and, thus, saving more.
Standard disclaimer: I track my net worth on the last day of each month, so that it remains consistent based on the usual fluctuations in my monthly spending.
Today I'm grateful for: attending my first wedding with the boy (not ours!)
Liquid Assets
Cash (checking, MMA, W2S): $31,266.43
GNMA: $19,456.75
Total Bond Index: $19,656.71
Total Stock Index: $25,625.89
Total Liquid: $96,005.78
Percent Change: -1.66%
Retirement Assets
Roth IRA (Target 2045): $5,513.12
403(b) (S&P 500 Index): $18,641.69
Total Retirement: $24,154.81
Percent Change: -6.92%
Total Net Worth: $120,160.59
Percent Change: -2.76%
I'm basically at the same point right now as I was in December of last year between the combination of no real income for 2ish months and the tanking stock market. I'm still in the 6 figure club, but I'm a little concerned that my net worth did not increase at all this month with my increased paycheck and, thus, saving more.
Standard disclaimer: I track my net worth on the last day of each month, so that it remains consistent based on the usual fluctuations in my monthly spending.
Today I'm grateful for: attending my first wedding with the boy (not ours!)
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