by Hope
I bought a house. First time that I have ever bought a house really. And I did it ALL ON MY OWN!!! You have no idea how incredibly proud I am of this.
The total loan amount is $98K. My monthly payment will be $662 for now. And it appraised for $130K. I think I did good, really good. Thoughts based on those numbers? We are two weeks in from closing (June 15th) and thus far, no buyers remorse. I really thing this was a good move.
What I Bought
The home is a single story, all brick house built in the early 70s. (I thought it was the 50s, but have been corrected by county records.) It was 3 bedrooms, 1 1/2 bath with a little over a quarter acre lot. No updates had been done to the home since it was built.
The seller (my landlord of 4 years) paid for a new roof, new blower motor for the A/C and new electrical. It was still a fuse box!
Similar homes, based on the appraisal and Zillow searches, are selling in this area for an average of $115-142K. I got it for $95K and he paid closing costs. (I started at $90K but went up to $95K when he agreed to pay for the improvement listed above.)
What We’ve Done
We have been BUSY! And I have learned a lot about power tools. We tore out the kitchen in its entirety and Gymnast BUILT new kitchen cabinets. Seriously! My 16 year old designed and built new cabinets. No top cabinets at all. And the bottom cabinets are all open shelves. We then used plumbing pipes and reclaimed wood to make some “floating shelves” up top.
Pardon the chaos, we are in “home makeover” mode
We don’t have countertops, saving money for those after I pay off my car. So we’ve just got plywood laid on the cabinets for the time being. It works. On the other side, we made space for a future dishwasher, but we know that’s months away. While I worked extra jobs to save for a sink, we did all our dishwashing in the bathroom sink…that was a ROYAL PAIN. But so worth it.
We lived without a sink for about 3 weeks as I worked extra jobs to save for one. It’s now been put in, temporarily with our plywood countertop. The hole for the dishwasher will remain empty until I can cash flow one with ‘extra job’ money. Something to look forward too.
We put in a fence and back deck with the help of one of the twins’ firefighter friends. Since wood is so expensive, we used hardware cloth (larger opening chicken wire essentially) between fence posts instead of wood.
We had planned to build wood railings, but again with the price of wood, these pre-fabricated ones were cheaper.
Next goal is to put in a back door, but that’s another savings goal. I’ve begun a running list of house projects. But we are trying to DIY as much of it as we can. So far, I’ve been super pleased. And we are learning ALOT!! I really enjoy this type of work.
We have decided the style of our home, the inside at least, will be industrial meets shabby chic rustic farmhouse. I love it. I am loving doing it. My kids are participating in the improvements and making it our own. And I am definitely loving having my very own home. After WAY TOO MANY moves since the kids’ dad and I split, 13 years ago, this is heaven. So grateful!
Hope is a creative, solutions-focused business manager helping clients grow their business and work more efficiently by leveraging expertise in project management, digital marketing, & tech solutions. She’s recently become an empty nester as her 5 foster/adoptive kids have spread their wings. She lives with her 3 dogs in a small town in NE Georgia and prefers the mountains to the beaches any day. She struggles with the travel bug and is doing her best to help each of her kids as their finish schooling and become independent (but it’s hard!) She has run her own consulting company for almost twenty years! Hope began sharing her journey with the BAD community in the Spring of 2015 and feels like she has finally in a place to really focus on making wise financial decisions.
How much did you put down? What are your property taxes? Do you have to pay PMI? Does this monthly payment also include your homeowners insurance?
I put down $3,500. I would have to look up property taxes. Yes, PMI is currently in the loan, but since the house appraised for $130K I’ve been told I can fight the PMI. And yes, payment includes homeowners insurance.
How did you figure out your monthly payment without knowing what the property taxes are?
You may have something there. I just assumed my property taxes were included in my escrow. I need to check on that.
I now I paid some portion of property taxes when I closed but not sure what all that covered.
Need to dig in and find out if that’s a bill I’m going to get at some point.
You probably should have waited to do any renovations until you closed and the house is legally yours
Probably, but my landlord and I have always had a great relationship. And it worked out great!
How did you end up with a $98000 loan balance if you paid $95000 and he paid closing costs?
There were some fees and expenses outside of the closing costs, I had them rolled into the loan. I put down $3,500.
$6,500 in fees outside of closing costs? And you only put down $3,500? That does not feel like an impressive financial decision. A low price tag doesn’t always equate to a sound money move.
I am plan on reviewing those documents again now that so many of people have commented on how odd this is.
I love the deck! Also can’t wait to see the finished pictures of the kitchen. Great start!
Thank you. I am having so much fun making this house exactly what I want. And the DIY part is so fun, frustrating at times for sure, but fun!
Why is your loan for more than the purchase house, especially if the seller paid closing? What was your interest rate?
I thought (but could be wrong) that you were saving for a house. Do you still have that money? What are you earmarking it for?
I wasn’t…
My interest rate is 2.99%.
There were some fees and expenses outside of the closing costs, I had them rolled into the loan. I put down $3,500.
Congratulations!!
Thank you!
I don’t want to rain on your parade, but I think you should talk to some professionals about these projects and make sure you’re doing them in a way that adds value to your house. An obviously DIY kitchen remodel can be worse than no kitchen remodel. The door to a deck may have been important to put in before or as part of building the deck, rather than after. Not many people want all open kitchen shelving, in fact I’ve never seen it for lowers, and I absolutely hate it all around, everything gets dusty/dirty. If you’re new to these homeowner projects, it’s better to start small and hire out the big stuff. Otherwise, you end up having to redo everything a few years down the road.
I decided that this is going to be my home, not my investment, so I am doing what will make me happy. I understand that this is contrary to what all real estate investors would say to do, but if I’m going to die in this house, well, for the first every I am looking forward to having a home that is just the way I want it. (And for the record rustic farmhouse is HOT right now style wise).
And I love that I will always walk into my kitchen and see the cabinets/shelves built for me. Worth so much more than money to me.
I’ve seen open lowers once, at my great grandparents. It was a function of growing up in extreme poverty (her growth was permanently stunted from malnutrition) and living through the Depression. It wasn’t a design choice, it was being afraid of putting in cabinets, and needing that money later for food….
Wow, I can certainly see that being a thing.
I chose open lowers, in part, because of our experiences with poverty.
When we had no where to live and were graciously offered the camper, we ended up having quite a lot of issues with rodents and dampness. It was so gross!
I wanted open lowers so nothing could hide. I chose the same option in the bathroom that was remodeled, have a couple of drawers but the bottom is open. The enclosed cabinets just creep me out now.
I’m happy for you, Hope. I’m in a high cost of living area and can’t imagine a $660 mortgage payment. With your income it should be totally manageable. Congrats!
YES! I am loving that I could literally work in fast food and support myself in my old age, if it came down to that. Not being house poor is a dream come true.
Wow. Congrats on the house. How are you getting power tools? Those are expensive. I get wanting to do projects, but you’ve been living in the house ‘as is’ for years: seems like a lot of projects to do all at once.
Thankfully when your son works at Home Depot for years, you are able to borrow what he has accumulated!!!
Why is your loan $98k if you bought it for $95k?
Hope, can I request a post about your new job? How you are liking and adjusting to the change to a corporate position? Challenges, positives, negatives, etc?
Yes, great idea.
First off, congrats! Huge step and I am very, very happy for you! The deck looks so relaxing and how cool to have your son make your cabinets. Now for something to manage expectations…as for PMI, it is very hard to get rid of. Your mortgage possibly even has it written in that you must pay down to the LTV they need (not new appraisal) or be in the house a certain amount of time and pay down to the LTV. Can you elaborate what the additional $6500 in fees were that brought your mortgage up to $98,000. Insurance pre-paids? My suggestion is to create a “house” account as well as a car “account” and work towards $10K in each and once you get there, then use any excess for fun house plans and upgrades. Having owned many homes, there are always yucky surprises. On another note, congrats to Beauty for paying off her car. You are making a profound difference in her life and that is commendable.
I know a year of home owners insurance was paid at closing. I’m going to have to dig in and figure out the rest.
I love the idea of separate savings for house and car especially now that my EF is fully funded.
Congratulations!
you paid 95k, but it was appraised at 130k, and you said the current market value is double, so 95k times 2 =190K, that means that its value has gained 60k. 60/130=46% gain. you probably do not have too much equity since you put 3.5k down. In 4 years the value has gone up 46%? seems impossible since in 2021: House prices surged by an unprecedented 18%1. 2022: The growth rate slowed to 4.8%1. 2023: Prices increased by 6.5%
how is this even real? i should probably post in your current post about selling the house.