My Home: A series about the home buying process through the eyes of a first time home buyer.

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.

Originally, I wrote:

So, my monthly mortgage? @ 6.85% 30 yr loan would be $2,621.00/month. Now, to estimate everything else. I’m going to estimate on the high side.

Home Owners Insurance - Assuming .5% per $100,000 in home value = $2,750.00/year

Property Taxes - Assuming 1% per $100,000 in home value = $5,500.00/year
Maintenance - Assuming larger than average maintenance costs for first year = $10,000 for 1st year, $5,000 there after. This includes a lawn that might need some care…or new flooring…things I think I’ll probably change out when I move in.

Utilities - Cable, Phone, Electricity, Water - Based on how much my friend pays - $3600/year.

Initial Purchases: Equipment, furniture, appliances - $5,000 for first year, $2,500 there after.

1st year total without mortgage = $26,850.00 (or $2,237.50 / month)
Thereafter = $19,350.00 (or $1,612.50 / month)
1st year monthly costs with mortgage = $4,858.50 per month
Monthly thereafter = $4,233.50 per month

I’m going to adjust costs to more realistic levels based on feedback received and comments from friends and family. With the same monthly mortgage @ 6.85% 30 yr loan = $2,621.00/month.

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.

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…

Anonymous comments are always interesting. Everytime I see a comment by an Anonymous poster, it gets my juices flowing…is it going to be critical? Is it going to be an outright bashing? Is it going to be something real? I always hope it’s the later…something I can learn from. However, I do get comments that make me wonder if they even read my post in the first place…

For example, take this comment about my recent post on tip jars:

At 28/6/06 23:14, Anonymous said…
i hope you’re joking. don’t tip if you don’t want to. it’s really that simple. 

Now really, as if I didn’t know that. The point is, the tip jar is excessive. It should be put where a transaction is concluded, not where it begins. It’s really that simple.

Or take this example, in my post on a deceptive 0% offer, I wrote, “Sure it’s my fault for mis-reading the offer, but still it just doesn’t make sense.” So I get a comment:

At 15/6/06 23:17, Anonymous said…
It IS your fault. I would not have waived that. You got lucky. 

Did I miss something here? Uhhh, I said, “it’s my fault.”

And finally, in response to my post on commercials I despise…

At 21/6/06 10:31, Anonymous said…
The Mac commercials are amazing. What I am finding interesting is how many PC users get upset at the Mac commercials? Is it striking a nerve…? 

Let’s face it. Macs are a superior machine. Hands down.

Let me ask you this, Anonymous, what’s your goal in posting something like that? To stir up a childish “PCs are better than Macs” war? Hah, please. The proof is in the pudding(?). Just look around…there’s a reason why PCs are much more common…and the reason why Macs now share PC hardware. So hah, Anonymous. Take that! (Really, I like Macs…)

I wrote a post earlier about buying airline tickets, and I received one comment, but it was a good one, from Anonymous:

you actually post tips like this? 

I took that comment as sort of a jab at the fact that my post suggests cheating or taking advantage of a site like Expedia or Orbitz, but a comment I appreciate none the less. In fact, so much so, that I’m going to respond in its own post. I definitely don’t condone “using” another site simply to, well, take advantage of them. However, I do believe in the mantra, “the marketplace drives all decisions.” Even if I didn’t post it, I’m sure others have already been doing it.

So that being the case, the question becomes, “Is it okay to use _______ travel site for the sole purpose of finding the best price, and then booking it to the airline’s site to actually purchase the ticket(s)?”

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To me, the answer is a firm, YES! One of the reasons I blog is to share my knowledge of how I save money, not to benefit an airline or travel agency. If consumers start taking advantage of a service made available on a site like Expedia, Orbitz, etc. and then go and purchase tickets at the airline site, then maybe the business model at Expedia, Orbitz, etc. needs to change. For example, they could charge for the service of finding the cheapest flight. In any event, I definitely don’t condone cheating. To me this is not “cheating” the system, as consumers, we are the marketplace for travel sites like Orbitz and Expedia. Thus, if informed consumers start doing this more frequently, than the travel agencies need to make the change, not us. Wouldn’t you agree?

I recently read a post by Madame X, Net worth update. What caught my attention was the Charity portion of it and one of the comments:

At 3/31/2006 5:30 PM, Anonymous said…
Charitable giving at zero. Ouch. Do you volunteer your time, perhaps? 

Charitable giving is very much a person’s decision. If it doesn’t come from the heart, then it really isn’t charitable donation, it’s a payment…why not just call it a bill.

Another issue with charitable donations that I have is the “10%” number. I’m all for donating money to charities, but I constantly see articles documenting that people donate or should donate 10% of their salary to charities. It’s just not right to me. I know, I know people just want some idea of how much to donate, but really that’s just not right. Everyone donates based on what they feel is appropriate. 10% of someone who’s making $10 million versus someone who’s making $20k a year is a big difference…and is very relative.

I probably come off as an a$$h0le for saying something like that, but I’m honestly disturbed by comments about people’s decision to donate if they didn’t solicit it. Sorry, continue on…

There seems to be a bunch of reasons for not divulging income information ranging from contractual agreements to being boastful to self-pride to being non-anonymous…can I say that? non-anonymous?…to being a little scared.

Terri from Educating the Wheelers goes the non-anonymous route, thus too much info can be inappropriate. And Jose feels it’s cultural taboo. I feel that’s true too.

Apollo says,

Everyone has an income some a little more then others depending on occupation or business savvy. I suppose we shouldn’t value our self worth based on one’s income. But given we live in a highly consumerism and materialistic society, it’s difficult to ignore sometimes. 

And John who said,

For me it’s an issue w/ pride. I make decent money for someone in my situation, but feel it’s not good enough compared to some of my friends and family. I think if more bloggers out there set a trend of revealing their income, I’d feel a little more bold to do so. Maybe you’ve started something by bringing it up…. 

I think for me it’s an issue with pride too…Not only in the sense of how I stack up to everyone else and them to me…I guess it really is a sensitive area…We can always look at our net worth and figure out ways to increase it, our incomes are a little more personal and sometimes outside our control…Maybe it’s the fact that we never make enough…so we feel somewhat inadequate?

Maybe we should all take the perspective of SingleMom,

I never understood what’s the big deal. It’s shielded like it’s life or death info. If someone knew your salary, what could they do with the information? Tell someone else? Ok, so what? 

Or we could be in a situation like Kassy, and this topic really becomes moot…since income is not a secret.

Maybe one day we can share financial info without the worry of being judged. That’ll be the day…It seems like financial blogging is a step towards that direction. Thanks for everyone’s input!