8/25/2010

House Fund Goal

Now that we have a number, Jordan and I can solidify our house fund goal.
  • At least 5% downpayment
  • At least $5,000 closing costs
    • we won't need to pay a realator, but we will have legal fees and I'm sure other things that we don't know about.

So, while we won't be pushing to reach our new goal until after Christmas - we know what it is.

Before anyone comments and says that we ought to have 20% to avoid mortgage insurance, we know that technically we would be better off if we saved $52,500 - but it is simply not realistic.  If we save more than the initial $20,000 - that will be fantastic, but we know that once we have that amount saved, we'll be technically ready to take the next step - that's when we'll talk to my aunt about firming up a timeline.  There is no point doing it any time sooner.

Jordan and I also talked about saving an additional $10,000 cash for things above and beyond the renovations that we will need to do.  These things would include new appliances and any new furniture that we would need.  We will push for this once we hit $20,000.
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5 comments:

  1. Congradulations to you two for being so organized and planning before, instead of after the deed! We just moved into our new home (2 weeks ago) after having lived in one spot for well over 10+ years. If I can give you any advice, it would be this. You need to have money for all the little things you're going to need for a home. Don't forget your hookup fees, change of address at the post office, stuff like that. Microchip any pets in case they get out & are picked up. You're also going to need money to buy rods & curtains, little things for the kitchen & bathroom, cleaning supplies for the house, little extras like closet organizers for storage, etc. If you've never owned a home before, you'll want some tools, drills, hammer, studfinder, lawnmover, BBQ, etc. Even the furniture adds up.

    We moved from one house to another (we moved from west to east and had a house full of contents) and we still needed a lot of stuff to get set up. It's amazing how it all adds up. We knew this would happen so we made sure to have a large amount of cash available for this but the first time we moved we put all of our money into the down payment and then were strapped for cash. Since you've got time & know the house you're going to be moving into, do an inventory of what you're going to need and the cost. You won't be stressed by the extra money you've got to spend because you'll be prepared and have it saved.

    Good luck!

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  2. Hey Jesse. As someone who purchased a condo without a sufficient downpayment (at the time, I didn't know any better), I was charged an extra $4958.00 as an Insurance Premium by my mortgage company. It is calculated as a percentage of the loan and is based on the size of your down payment. When I figured out that the first year of my mortgage payments only paid for that insurance and I had not even started to pay off the mortgage, I was really upset.

    I'm not saying you shouldn't go with your original plan. I totally get that you have a timely opportunity that you can't pass up. Just make sure that you've added these premiums into the total cost of your home so you can be prepared when you go through the overwhelming process of closing on a house. You will feel like you are writing cheques to everyone by the end of it!

    Also as a side note to the whole mortgage thing...make sure that you do accelerated bi-weekly payments. Again, I wish I knew then what I know now. I saved many YEARS off my mortgage just by making 2 more payments every year.

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  3. Aw, man...totally didn't spell your name right! Jessie! Sorry!!

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  4. Awesome estimate! And you are almost halfway there!!!

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  5. If it's not realistic to save that much, you shouldn't be buying a house.

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