May 30 2009
New Home Shopping - Establishing Parameters
I have to preface this with the statement that Lisa and I are more than a little risk averse. We are conservative in every aspect of our financial lives.
When we bought our current house we crunched the numbers, and figured out our maximum “affordable” price. We figured this was the number we could afford if we were both reduced to minimum wage jobs AND would still leave us off the “house poor” category.
Sound pessimistic? Yeah, probably, but that’s the way we roll.
Now, recently we had agreed amongst ourselves to explore the housing market and see if we could find something a little larger that we could occupy for years and years and that would address some concerns we have with our current home. My participation was a little reluctant as I love our current home and am loathe to pay closing costs and realtor fees.
The ceiling on cost was expanded for this exercise, although all calculations were made based on our present mortgage expense (changing our present accelerated bi-weekly extra to principal mortgage payment for an identically priced single monthly non-accelerated non-extra to principal mortgage payment) which increased the ceiling on purchase price approximately 100K from our present home.
Seem logical?
At the end of the day our mortgage payments would remain the same, but we’d be paying for 10 years more than with our current house (which presently has 12 years in payments left at the current rate).
Ok, so the basics had been thought out, next I needed professional verification or “proof of concept” to set my mind at ease. This meant meeting with a mortgage salesman, er…professional.
Don’t forget your property taxes will increase…
I wouldn’t let that spook you. There are always curves along the way, even if you stay where you are. Enjoy house hunting! We had fun and only agonized for a couple of weeks. Selling our place before looking for our new home was the scary part.