Sometimes reality sucks doesn't it? I've done some analysis on the real cost of ownership on my future home, and it hit me like a sledgehammer. Sorry Freedumb, try again. I got some great feedback (I was even told I'm "spoiled"). Before I go on, I'd like to refer to my post on why I want to live here in Hawaii. I realized I really needed to think about it again (an argument for blogging!). The most basic question I asked myself again, do I even really need to get a home right now? The answer? No. I'm not going to throw away my dreams of getting a home, rather I'm going to take a step back and change my requirements and my timeline. CityGirl has a great post about knowing thyself that would be worth checking out. Originally, I was excited to get a home because, well, it'd be my own place, the American Dream, blah blah blah. My dog would have a yard to run around in. I'd have something to take care of and watch as my investment grows. Then reality hit, and I got great feedback. I realized how much it would really cost to own what I want. I don't want to be living paycheck to paycheck, nor do I want to dig my own financial grave. So, that being said, I've decided to put off my home purchase even beyond next summer for as long as I can wait. Why? Well, I'd like to save as much as I can to have a bigger down payment so that I don't have to borrow too much. (Thanks NCN for making me think about credit a little more) I'd also like to observe the housing market longer. I've decided to do a couple of things: 1. Create a designated "house fund" that will be for my down payment. This is so that I'll have some extra cash for everything else. I can't drop my whole savings into the house, that would be dumb. (Madame X made me think about this a little more) 2. Reduce my requirements for my house. See below.
|Original requirements||My revised requirements:|
|~ 5000-10000 sqft lot size ~ 1200-1500 sqft living space - A decent sized yard, with a portion fenced off for Brownie to run around. - Early mail delivery. Yes, I like having my mail delivered early! - Hands free faucet in the kitchen. - Target price of around $500-650K - Off major streets - Level lot - 2 car garage - Fairly up to date electrical system, if not then the ability to upgrade easily. - 10' ceilings - 4 Bedrooms (Maybe a split, two level house, so I can rent one and live in another) - Wired for CAT 6E. I'm pretty sure this is something I'll have to setup myself. - I would like a location about 15 mins from town. - Friendly neighbors...who wouldn't want that! - Decent amount of street parking - Breezy and cool location - Fairly close to freeway||~ 4000-6000 sqft lot size ~ 800-1200 sqft living space - Target price of around $450-600K - Off major streets - Level lot - 2 car garage - Fairly up to date electrical system, if not then the ability to upgrade easily. - 2 Bedrooms - I would like a location about 15 mins from town. - Decent amount of street parking - Breezy and cool location - Fairly close to freeway|
1st year total without mortgage = $19,350.00 (or $ 1,612.50 / month) Thereafter = $15,350.00 (or $ 1,279.17/ month) By the way, I am considering once a year fees as part of my monthly expenses just for a better picture of my total expenses. 1st year monthly costs with mortgage = $ 4,233.50 / month Monthly thereafter = $ 3,900.17 / month Hmmm, still a little high, so I've increased my down payment to $200k, which would reduce my mortgage loan to $350k. My new monthly mortgage @ 6.85% would be $2,293.00 / month. With the same other expenses I wrote about before: 1st year monthly costs with mortgage = $3,905.50 / month Monthly thereafter = $ 3,572.17 / month Better. Still high, but at least that's manageable considering my current income. I'll keep trying to save even more for a down payment. The more the better. The journey continues...
Home Owners Insurance = $2,750.00/year Property Taxes = $5,500.00/year Maintenance = $5,000 for 1st year, $2,500 there after. Utilities = $3600/year. Initial Purchases: Equipment, furniture, appliances - $2,5000 for first year, $1,000 there after.