Friday, April 1, 2011

What a Day

Well I had an interesting day.  Woke up, drank water, poured coffee, started up my pc, smoked a cigarette, and started on school.  Started work, kissed Snack Monkey goodbye for the day and then I had a very interesting work-related call.  I can't go into the details and it's quite likely none of you would really want me to anyway but the short version is my new boss (yep, didn't see that coming!) wanted to come over and introduce himself.  I went frantic changing out of my jammies, pulling my hair back, cleaning up the living room and my office as best I could, picking up the cigarette butts on the balcony that had bounced off the rim of the ashtray instead of going in like they're supposed to and just generally picking up the average daily clutter.  It was a very long, informative meeting that I am feeling positive about but led to a MOUNTAIN of work that needs to be done to transition the company for new ownership and most, if not all, of it is falling on my shoulders.  There was so much to be done that it was 3 pm before I knew it and I'd had NOTHING but coffee and water so I snarfed the leftover panini from last night, cold, with one hand while still working at my computer with the other and gulped down some water.  No sooner did I finally wrap that up for the day (though I have some more things that need doing tomorrow) than the phone rang and it was my mortgage guy wanting to discuss how my savings account is looking and where we're at in that process; let me know what I'm pre-qualified for as well as what I could afford to pay for a home and still keep the payments where I want them.  I'm qualified for 100,000 but I want lower monthly payments so he thinks I should stick to 90,000 or less.  Snackers and I have been looking at houses that are 50,000 - 60,000 so that gives us lot's of wiggle room!  YAY!  I was waaaay too exhausted to cook so we went out and the meal was so much less good than so-so.  Just not impressed at all but whatev, at least I'm not hungry and all I care about right now I crashing.

All in all it was a positive day but highly adrenalin filled and now that the adrenalin is wearing off I am completely and unbelievably exhausted ... and I still have more school work that I have to get done tonight.  First I have to go through all my paperwork to find my student loan statements and fax them to my mortgage guy - then school.  Then there is no way in hell I'm exercising tonight; I am going to take a nice cold bath because it's hot as hell in this apartment but I refuse to turn on the A/C and ruin the string of beautifully low power bill's I've had lately, and then I'm going to curl up with a book and fall asleep before I finish the first chapter.

5 glasses of water
1 cup of coffee w/creamer
1 leftover panini
1 open faced veggie melt (bleh)


  1. Sounds like you had a very busy day!! Have a great weekend.

  2. That really was a crazy day! Hope you get some much needed rest. And good luck on getting just the home you want for less than you're paying now in expenses! :)

  3. I am *definitely* not trying to discourage you from buying a home -- owning a home, when one is prepared and ready, is a very smart thing to do (if done *wisely*). And, by looking at homes roughly 50% of what you qualify for is certainly one sign that you are being wise. Good for you!

    The only cautions I want to advise:
    1) Don't merely look at the *mortgage*-payment (and related details); be *sure* you are also considering things like: homeowners insurance (yes, you need it), maintenance-costs (will you have enough disposable-income every month to buy a new water heater *with cash* when it burns out unexpectedly ($600-1000) or a new furnace in the middle of winter (several thousand) or a new roof one year when yours starts going south on you ($5-10K)??? Many homeowners think owning a home is a magic-investment; it's not. *MAINTENANCE* is critical to maintaining the value and livability of your home. One recent example from my life: an upstairs patio sprung a leak several years ago and leaked into the structural-space between the patio (above) and the garage (below). It was so small that no sign of the leak was visible, for years. About a month ago it finally sprung into the garage. After opening it up, we find mold. Turns out it's "toxic mold". Great, so now we have a potentially serious health hazard inside our home. And, until we get it properly fixed, it's a serious impediment to ever selling our home for a decent price. And, as it turns out, it's location happens to have crossed several structural-components; we can't just remove a sheet of drywall, clean and treat it, and drywall it back up. Whole pieces of several walls have to be completely opened up, carpets have to be pulled back, door-thresholds have to be pulled up. It could take a professional crew well over a week and easily cost $10K or more to finish the job. Oh yeah, and surprise surprise, virtually none of it is going to be covered by insurance... since it was a slow-leak it doesn't qualify as a "sudden accident" and most insurance companies nowdays only cover "sudden accident"-type of events. Had a pipe ruptured suddenly and flooded within 24 hours, we'd have been good. But very small patio-leak that took years to discover, not covered. Someone (in our case, probably the HOA) is going to have to pay cash for this thing. Paying a home mortgage is only *HALF* the expense of owning a home; time and cash for maintenance can be significant.

    2) Make sure you are considering the map you planned out for your education; the plan, as I recall, was that you would go for about a year or so and then slow down or stop and pay off your loans, and then start back in. Great plan; I'm still dealing with one of my loans and it's a bummer (and it was *very* small compared to most people's loans due to all the free money I got along the way). Make sure you calculate this into your budget, you don't want to sink a great plan by making a hasty decision on buying a home.

  4. Unlike apartments, when they start sucking, you can't just move out of home that starts sucking. To a large extent, you're sort of stuck with it -- sure, you can sell it, but potential-buyers are usually pretty critical and it can take a long time to sell a home; especially in this market. In fact, if I were you, *plan* on living in this home no less than 10-15 years. Perhaps the economy will recover and steam-roll along and you'll be upgrading in 5 years, but I doubt it. It's better to plan for the worst, and AFAIK all the decisions we are making in our economy are all the wrong ones to make. AFAIK, we're in for a bumpy ride. You could buy today, in 3 years suffer a 50% loss in the value of your home (due to markets tanking even further) and it could take you 20 years to recover... not going to be able to reasonably sell given such conditions.

    NOW HAVING SAID ALL OF THAT: if you have thought of all of that (hopefully yes) and you have accounted for all of that, go buy a home! There's a really good chance that you are in the best buying position now than most of us will ever be: the market is way down (meaning you get a great bargain) especially where you live, and you don't already have a home tying you down (unlike me; I'd love to upgrade in this environment but selling my home is not likely without taking a pretty good hit so it's not really worth it). And, buying around 50% of what you can afford is a *fantastic* positive for you! GOOD JOB BEING SMART IN THAT AREA! :D

    There's one more (positive) thing to consider: if your potential-home's mortgage payment is equal-to or less-than your current montly-rent (and you are buying significantly-lower than what you are qualified for; which you are) then it's a signal that it's an almost sure-thing: *BUY* (provided the home doesn't have several problems your home inspector is worried about). When mortgages are equal to or less than rent, buying is usually smart; when rent is cheaper, sometimes renting will be smarter.

    Home ownership is awesome; financially it can have a very positive-effect. But you just have to be smart and cautious. Heather and I were only half as smart as we should have been on our first home -- and, only escaped tragedy through sheer luck (the market tanked just a few months after we sold; the home we sold was valued at about 50% of what we sold it for just a year after). We learned from that and made sure our next home was WELL within our budget so that we wouldn't run into troubles we couldn't deal with.

  5. It's kind of hard to explain but we do have a plan. First, homeowners insurance and taxes will be included in mortgage payments. Second, we're shopping for a cheaper home because we want our mortgage payment to be less than our current rent. So the breakdown is this:

    All of our current bills total = $1,800/mo. My net monthly income is $2,200. So, right now I pay all of the bills and then the extra $400 either pays the interest on my loans as it accrues (so that when I finish school I'm only paying interest on principle) or goes into savings. Snackers nets approx. $1,400/mo and he only has to pay $740/mo for his ticket, groceries, smokes, and to put gas in the car so the remaining $660/mo also goes into savings (his income fluctuates though so it's actually between a low of $500 and a high of $660).

    We're working toward $7k in savings by house buying time but only 3.5% of our total house price will be needed for down payment plus whatever closing costs we can't get the seller to pay so whatever is left over becomes Emergency Savings. At that point Snackers will continue putting his $500 ish into savings and I will continue putting my $400 ish into savings but the difference saved between current rent and our mortgage payment becomes payments toward student loans.

    We'll only have one savings acct. but we'll consider 10% of that "fun money" for making home improvements to increase value and decrease utility costs (like putting in better insulation/windows etc). So if we have $10,000 in savings that means we can use $1,000 for home improvements. We plan on letting the 10% margin add up until it's high enough to complete a home improvement project, then build it back up again before starting another project so we never deplete the emergency fund too far.

    We also have a $2,000 open line of credit that is completely open for emergencies in case something comes up, and a $1,500 line of credit with a furniture/home store. If/when that gets used I can make $150-$200 payments from my "extra income" until it's paid off then start putting that back into savings.

    With work going like it is I've decided I need to get my degree ASAP instead of doing an AS and then paying off loans so I'm going to get a BS at least but I am going to make payments on those loans even while I'm still in school - using the difference between current rent costs ($762/mo) and whatever our mortgage ends up being (we're aiming for $500-$600/mo mortgage payments). Right now our power bill is $300/mo in the summer. When it's less than that I still budget $300 but put the difference in savings after the bill is paid. That's because our insulation here SUCKS, Jenn's big 5 bedroom house had lower power bills than we did some months. So we're hoping that buy choosing wisely when we pick a house and then making energy saving home improvement projects top priority, we can save even more money through utilities. We're also looking for a place closer to Shawn's work so we can save money on gas (currently we spend about $80/mo).

    It's very complex, I know. But we do have a system. If you see major flaws let me know. Snackers just pretty much says "yep looks good" and lets me run the show. lol

  6. No, looks great.

    Be *positive* your homeowners insurance will be included with your mortgage payments -- I've never heard of that. Make sure you get the name and number of the agent managing that policy and call them to confirm it's actual homeowner's insurance and not "*mortgage* insurance". In both of our homes we had to secure our homeowner's insurance separately; but maybe Nevada is different or recent changes have been made to lending laws or something.

    Otherwise yeah it looks really good.
    I think you're going about it right.
    Be careful on the energy-savings thing... not saying you shouldn't do it, just don't get "caught up" in it... back when gas was first shooting for $5/gallon 3 years ago I ran out and bought an $1800 scooter to commute around town to save gas. DOH! Forgot to do the math; it would've taken me at least 3 years just to pay the scooter off. DUMB DUMB idea!


  7. hehehehe! Actually that is one relief of having the new boss. He's going to let me keep working from home which is great. We were worried that if I had to get a job out of the house we might have to buy a second car and that was NOT something we wanted to do. You on a scooter ... what a fun mental image. :)