My last post went over my one year anniversary. And then I disappeared.
I did not intend for this to happen, but it did! I’ll give you a little update about what has happened in my life since then, and when I intend to return to my normal posting schedule. I guarantee you that I have been swamped.
Life Events
So, this has been what’s been keeping me away:
1) I was in the process of house hunting and found a house I liked.
I had already got a mortgage pre-approval so I had already shopped rates and fees for the most part. I put an offer in, she countered, I countered, and she accepted. The offer was for about 2% lower than the listing price (which is about where my market is… no real big crash here). It also came with an $8,500 seller’s assist for closing costs based on some work I knew it had to get done. Then, I had to get all of the mortgage stuff finalized. I got a 4.875% interest rate with no points based on a 780 credit score! The fees were low, too, coming in at $750. I sent the good faith estimate to a few lenders and even had one tell me “We can’t do anything to compete. Take it.” That’s one of the perks of having a good credit score! :)
The next step was getting a competent home inspector. When I thought I found one, I told the agent. She referred to him as the “deal killer” because of how often his thoroughness kills deals. I knew I had a winner. His report came back and unearthed a few more issues that I did not know about. We are currently getting estimates for the work needed and the seller is going to cover the major issues (like an old Federal Pacific Stab Lok circuit panel that is known to be a safety issue, so much so that some insurers won’t even insure your house with one! Check yours out, FP installed millions of them in the 70’s before they were caught fudging their numbers. 33% of the breakers are believed to be defective, a major fire hazard). I still have the termite and radon inspections to go through! What a process.
Interestingly enough, Lifehacker linked to my Rent vs Buy article. Obviously, I have come to the point where I decided to buy. Why? As one of the commenters on Lifehacker mentioned, renting out spare bedrooms could make this a more affordable situation for you!
Example: My mortgage payment will be roughly $1,300. I currently pay $515 in rent (my half with my friend). The house is a 4 bedroom. The going rate per bedroom in this area (a heavy renters market) is about $600 per room per month. That means I will be able to rent 2 bedrooms out and pay for the mortgage. Then I will be responsible for homeowners insurance, taxes (about $150 of the mortgage payment figured in), maintenance (estimated at 1% of the value of the house per year), and improvements (estimated at 2% of the value of the house per year). Or, what I will probably do is rent out 3 rooms, which will pay the mortgage and all of the other costs outlined. When you add in what I currently pay for rent, that gives you about $2,900 per month that I could spend on the house with their being no noticeable difference to my budget. The renter’s will literally be paying for not only the house, but the maintenance of it, too. The typical argument for renting goes something like this: “When my hot water heater breaks, I don’t call a plumber, I call my landlord.” The same will be true here, but when they call me, I will take THEIR money and pay for the repairs. Some people can’t deal with roommates, but it would be ideal for me, especially because:
2) I got a new job.
My current job is in the Warehouse/Logistics Management field for a Fortune 100 company. It was fun. Under my management, my location went from the worst rated building on the whole east coast to the #1 location on all of the large KPI’s (key performance indicators). We are now being treated as a pilot site for all of the new initiatives. So, what’s wrong? My company has a terrible HR policy that is geared towards retaining adequate employees and driving away performers. Annual performance raises were all under 2%. There was no distinction between a person who saved $250,000 from their budget in 6 months and someone who overspent their budget by $250,000 in 6 months. Furthermore, the HR powers to be do not realize the importance of process improvement in a manufacturing and warehouse environment. Everything to them is “people management.” That’s great and all, but a huge oversight in my opinion.
So I went interviewing. I found a job that will be much more challenging and give me a breadth of experience. I will now be a Consultant for Strategic Initiatives and Operations Implementation. A Management Consultant, in other words, but a much more specific kind — It will focus on the implementation end a lot more, which is what I am good at. The 1st year I will be making 15% more than I currently make, and if they were honest about the 2nd year trajectories for most people, I will be making 30-40% more than I make now by the 2nd year. Only time will tell. It’s a risk, for sure, but I am young enough to take risks.
This ties into the home buying thing. Why roommates? I will be traveling Sunday Night through Friday Afternoon so it’s not like they will be an annoyance for me. AND the fact that they will be covering my mortgage will put a lot less stress on me in regards to the possibility of not cutting it in a new industry. Without roommates, I would be screwed. With roommates, I would have time to re-align and figure something out if I needed to.
That’s pretty much it.
I’ve been going through both of those things in tandem, so by the time I get home I am exhausted and have something else to do (like creating separate budgets for buying a house with my current job, buying a house with my new job (this was before accepting the offer), buying a house in both of those situations but adding in renters, etc).
I will be back to posting normally hopefully in a week or two.
Thanks for sticking it out!
I'm MLR. After graduating from college debt free, I decided to write a blog encouraging people to adapt responsible and sensible personal finance rules.
