So this house buying this is starting to feel real. No buyer’s remorse yet. Of course, I’ve not actually bought anything yet.
Right now, I’m working through the mortgage paperwork. It’s a little scary. No, I take that back. It’s a lot scary. I’m currently staring at the fax machine as I send over nearly 100 pages of paperwork that I had to review and sign. The scariest part? The page that estimates all of my costs.
Actually, that’s probably my favorite page. It’s a Good Faith estimate of the final costs of everything. It lists my loan amount, my down payment amount, and all of the closing costs, as well as the credits being applied (I requested help with closing costs from the seller, for example). My lender warned me that it was probably a high number, so to not let it scare me, but it’s kind of the “worst case scenario.” And you know what? It’s not as bad as I feared it would be. I’m comfortable with the number as is. And that’s a good feeling. I’ve been smart with my money, saving for this day, and it’s doable, and I’ll still have money left over to do things like buy blinds for my windows and organizers for my (absolutely amazing) master bedroom closet.
The other scary thing is the estimated monthly payment sheet. It lists the mortgage payment as well as 1/12th of the yearly tax payment and insurance payment. Of course, that’s all estimated, so it could change. I already know that my insurance will be less, having talked to my insurance agent. They’re offering all sorts of credits, one for having my auto insurance there and one for having held renters insurance there since 2007. Apparently, a lot of lenders are requiring buyers to put that money into an escrow account each month, rather than waiting and paying the bill when it comes. You know me – I want to keep my money as long as I can. Who cares if interest rates are low? Even if I make ten cents off of it, that’s ten cents I didn’t have before. And who knows what will happen in the future? So with my credit rating, I managed to get out of that option. Of course, I’m just going to create my own little escrow account and put that money into a side account each month in preparation for the bills, but I much prefer that option.
All in all, it’s a little overwhelming. I can afford it, but it will be a bit more expensive than my current rent, what with the taxes and insurance. My roommate is coming with me, which will help (have to figure out how much to charge her), but I’m also going to have a number of expenses when I first move. Like blinds for the windows. The living room will probably go unfurnished for a while, and there’s going to be an extra bedroom that just sits empty for who knows how long. I’ve discovered that because of all of these new expenses, I’ve tightened my spending without even thinking about it. Suddenly, every penny really does count. It’s not a bad new trend!
Megan is a 30-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.