Our First Home!

We bought a home! And hell, let me tell you, buying a first home is stressful as hell.

We have been looking for a home for two years and finally found one that almost fit all of our criteria. Even if the timing wasn’t right(after all we are in the middle of a pandemic and the housing market is crazy right now), we decided to go after it because we’ve been looking for so long with no success.

Sometimes the right home comes along at the wrong time and that’s just how life works. You might have to jump on it when it does.

The process of buying that first home was longer than I expected and fraught with stress. However, I’m so psyched to say that I’m finally writing this from our new home! It’s an exciting time and the first few nights at the new place quickly made me realize that we made the right decision.

The freedom we have here is so much greater than our apartment and the amount of space will allow us to do things we just couldn’t do in our one bedroom place.

Already, I’ve taken advantage of this by setting up my office. I’m writing this from a recently purchased standing desk in my office, something that just wasn’t possible in our apartment. Hell, having a large office from which I can work and write is a first too. Look at how cool this thing is, it can move up and down to a preset level with one button press!

On the other end of the house, my wife finally has a painting/sewing/hobby room and the dog is certainly happy to look out the windows and bark at birds and squirrels.

The neighborhood is fantastic as well and walking our elderly dog is so much easier from our ranch home than it was from the third floor of our apartment. The views are much better too and make for a much more enjoyable walk with my wife and I. It’s not a hard beat since the comparison is the circles we made around the apartment complex parking lot before.

It’s also quite nice to be a bit further away from people during a pandemic.

While it’s nice to be here in the new place, it took a while to get here. The path to get our first home wasn’t all that easy for us.

Buying a first home is tough because you go into it with certain expectations and find that you have to change those pretty quickly to get what you want. That’s not always the case but it certainly was in our market.

The first thing we dealt with was the amount we were willing to spend and the area we wanted to look at.

For the area part, we really focused on two towns because they were right in the middle of our jobs and really close to some main working hubs in case we wanted flexibility in changing jobs. That clearly limited the inventory we had to look at and was one of the reasons our house hunting process took so long. We’re also pretty picky so that further limited our inventory.

After all, we lived in a pretty nice modern apartment so when we first started looking, we were a bit shocked at what we could get for the price range we focused on.

We started with a number in mind and quickly found that it was far too low for our neck of the woods. We saw a variety of houses in the low 300s that required so much work and could quite easily be described as dumps. It’s crazy how much homes cost in certain areas even if they require tens of thousands of dollars in work to make them decent at best.

We also had a few wants in mind like natural gas, public sewer/water and central air which limited our choices as well.

Thankfully, our real estate agent was a peach and she never pushed us to make offers or hurried us along. As the months passed, we realized that we needed to bump up our budget. That was tough for me as someone who’s so focused on financials but my mindset switched a bit from seeing housing as a financial choice that could be looked at on paper to more of a lifestyle choice.

After all, we could stay in our apartment with its modern amenities but it became clear to us as time passed that it was missing a few things. We wanted more space, a yard, freedom to make changes and the sense of ownership and pride that a first home could bring. My wife was definitely on that train but it took me a while to come around to that mindset and letting go of the focus on financials.

After all, apartments are clearly a lower stress proposition and might make more financial sense depending on your market so one has to see the change as a lifestyle choice as well.

In our market, it helped that rent rose at a decent clip so the financial aspect became a bit easier to work with as the limitations of a small apartment became more apparent. That was especially true recently as rates started to plummet and it became easier to raise our budget and focus on slightly more expensive homes.

We made an offer or two in the last year but they fell through because we were either too late with our offer or below what others were willing to offer.

The 2020 spring and summer housing season didn’t really happen due to lockdowns so we assumed we’d be living in the apartment until this was all clear. We signed our 12 month lease and two months later saw a house on realtor in our favorite neighborhood that fit most of our criteria.

We saw it, loved it and while it was listed at the top of our price range and we had almost a full year’s lease commitment ahead of us, we made an offer at full asking and it was accepted the next day.

It’s funny how that can work out like that. You stop looking that closely and it just smacks you in the face.

The house has all of our main needs except it had oil instead of gas which wasn’t a huge deal. Beyond that small negative, it had a fantastic location, was relatively modern with a great kitchen and most importantly didn’t need a ton of work. It was a one owner home and they clearly took good care of the place. Plus, it had window seat that we both love. Seriously more houses should have window seats or nooks you can read in and hang out.

It’s just so comfy to get in there and read! It’s still a bit messy as that room is our storage place for everything now but it’ll get there eventually. Once we saw the house, we made a quick offer and it was accepted a day later.

In this market and especially in this area, houses go in days so we had to make an offer at full asking. The reality was that we played around with lower offers before and it always led to us losing the home and now we were willing to be a bit more aggressive to lock this place down.

That offer was made in October and we finally closed on our first home mid December and moved in a week after.

The process was stressful and costly. I didn’t realize how much stuff you have to pay for when buying a home(and it’s even worse when you’re selling).

First, there’s the inspection which thankfully didn’t find anything major although there were a variety of things that needed to get done.

For example, our water heater is 29 years old and somehow still kicking but will likely need replacing soon. Our dishwasher is some old model that we thought we’d need to replace day one but it seems to work just fine for now. Two skylights upstairs had broken seals and so on and so forth. On top of that, there were a variety of small fixes and issues that needed to get done.

Luckily, the sellers were pretty accommodating and ended up fixing the major ones or leaving us some money to fix the ones they couldn’t get done due to timing. It’s quite crazy that even though these seemed like small fixes, the sellers ended up paying or crediting us thousands of dollars worth of stuff. I was glad they were so accommodating and that made the price we paid more worthwhile in my mind.

During all that came the mortgage which was the one of the most stress inducing processes I’ve ever been through. Seriously, my wife or I were on the call with the mortgage people multiple times a week trying to figure out what they wanted and trying to get in touch with someone.

The damn mortgage required so much information in a specific format that it made us pull our hair out.

Before that even progressed, we had to pay for an appraisal and for some reason that took two weeks so we had to push our mortgage contingency back twice which I’m sure annoyed the sellers and made us stress about whether or not we’d actually get a mortgage.

One thing I’d do next time is to get started on the mortgage process day one. We had our pre-approval and all that stuff but didn’t get the appraisal going right away which might have made this partially our fault.

When it did finally come in, over a week after it was expected, the appraisal came in at the offered price. It was then that we could finally proceed with providing the mortgage people with 67 pieces of information.

Our banks online portal was terrible and unclear and our mortgage consultant wasn’t accessible at all which made it quite an awful process.

The information they wanted and the format they wanted was ridiculous. For example, I had an address on my record they wanted an explanation for and all the portal said was please provide explanation of address. I wrote what it was in a PDF and e-signed it and uploaded it to the portal. One day later, I got the same ask, please provide explanation of address.

I had no idea what they were asking for and it kept pushing off progress on the mortgage process.

We finally got in touch with our mortgage consultant who said what I did was fine but the ask kept coming in every time and we couldn’t proceed with the mortgage until we got all that information. It wasn’t until we finally got in touch with the branch manager who got in touch with the underwriter that we found out it needed to be hand-written and hand-signed to work. That was just one of many items that made the process infuriating and stressful.

On the financial front, they want everything as expected. After all, they’re lending you a ton of money so they have to make sure everything is OK. However, be prepared to provide your bank statements, paychecks and other things multiple times as the mortgage process moves along. On top of that, be prepared to explain any weird movements in money between your bank accounts. Move a few to a fidelity account or out of a fidelity account in the past few weeks, be prepared to get a question about it.

In the future, if I knew I had a mortgage application coming, I’d avoid moving a lot of money between my accounts to keep it simple.

Thankfully, while the process dragged on, our sellers were patient and initially wanted more than 2 months to close. That was great because the mortgage process required all that time and we barely squeaked through even after a lot of prodding. We felt like complete asshole customers because of the amount of times we tried to get them to do stuff but it was totally needed to get things done.

I get that they’re busy now with all the requests for refinancing due to low rates but there has to be a way to make this process more seamless. From what I read, big banks are a total crapshoot when it comes to mortgages(we went with a big bank) and it’s a lot smoother if you’re dealing with someone local. However, the big bank offered rates that were a decent deal lower than the local banks so I was willing to suffer the crappy customer service for lower payments.

Speaking of rates, the low rates made the financial decision a lot less difficult in the end. Even though our purchase price was a good deal higher than our initial unrealistic budget, the falling rates made the overall financial proposition a lot less dire.

For example, a 325000 house in 2018 with 2018 rates(about 4.5%) yielded a $1900 payment with our state’s property taxes. At the same time, a 475,000 house would yield a payment of $2,800.

At the time, both of those were quite a bit above what we were paying in our apartment.

In 2020, with rates at 2.75%, that $475,000 would yield a payment of $2,400. That’s a lot less in interest and made it easier to focus on higher cost houses. It was still a bit above our rent but that had gone up quite a bit which made the spread a lot smaller.

Of course, the $325,000 would have a cheaper payment now but the quality of the property and neighborhood had only gotten worse in that price range as prices went up in general.

Our state is weird in that a $300,000 house is a total fixer upper while the $400,000+ range gets you into a pretty decent house in a solid neighborhood and $600,000+ houses are huge suckers. It makes it really hard to get a first home because the low end price range is already pretty high and the quality isn’t very good.

I think that’s a common problem in the northeast and it makes it really difficult for people to get out of the renting game and get their first home. That was partially why we stayed in an apartment for so long and were lucky enough to be able to save for a down payment on a first home outside of that lower priced tier of homes.

For us, that was the right decision even if we had to live in apartments into our 30s. We didn’t want to deal with a fixer upper and wanted to something we could move into without having to do major work on it before or while we lived there.

That’s what we found in this first home and why we were willing to get it done even if the timing wasn’t ideal.

After all, we looked for two years and found nothing so finding something we liked was a big deal and we had to jump on it.

Was it the right financial decision? I think so but you can never be sure. In the end, I don’t know.

After all, the timing did suck. We just signed our lease so that means we have to pay both a mortgage AND rent for a few months until they find someone to fill our place. I was hopeful that only means one or two months but who knows given the state of our economy. It’s possible that there aren’t many renters in that price range which could mean we could be paying two housing bills for more than a few months until our lease expires.

That would be less than ideal.

Secondly, housing prices are pretty high now given the lack of inventory and high demand due to low rates. That’s why we had to make an offer at listing price day one to get this home because every other place in this neighborhood in the last few months(only 3 were listed) was snatched up quickly at or above asking.

It’s possible housing prices go down once the pandemic is through and more people start selling. However, it’s also possible that the opposite is true and more people will want to move into homes and still beat out supply.

When you think of costs, since it’s a home and 2x the size of our apartment(and with oil heat), the cost of our utilities will go up as well. We already had one oil delivery and a propane delivery(for our propane fireplace) and it was pretty expensive. I’m not quite sure what the overall comparison of our bills will be but it’ll definitely be higher.

However, I feel pretty good about this decision even if the timing wasn’t great. I was quite concerned about the double payments when we made the offer but now that we’re in the home, I’m ok with the additional financial strain because I love the lifestyle change we’ve experienced. On top of that, I heard that we’re the only open one bedroom available in our complex so I’m thinking it won’t be too long before they find someone to take our place.

The reality is that if we wanted a house in this area, we had to be flexible and even if that leads to a bit of financial pain in the short term, it’ll be a good lifestyle decision in the end.

That’s how I feel about it now. It’s a pretty damn good lifestyle decision and something we wanted to do even if it meant stretching our budget and taking on some financial risk with our lease.

It’s impossible to tell if it was the right financial choice. I don’t know where inflation, rent or housing prices will go but rent has been rising at decent clip these last few years so the financials didn’t look all that bad given the low interest rates.

One of the things I’m concerned about as I age is inflation and owning our home certainly gives us protection against that for one of our biggest expenses.

On the financial side, yes, we’ll pay more which means I won’t be able to save as much but we’re also building equity and getting more space and land.

My wife rents a storage unit for some of her old family stuff so we can get rid of that along with our lease. The house payment is about $500 higher than the cost of those two things and it includes $600+ in equity that will grow every month. I think that makes sense.

Yes, it’s a higher expense but it’s 2x the size with a yard and a neighborhood we like more. It’s certainly a great lifestyle decision for us but I’m starting to think it’s a pretty good financial decision too.

I will say that owning a home is expensive. The amount of money we’ve spent in December boggles the mind considering the down payment, closing costs and all the new things we’ve gotten for the home(including my new standing desk).

We also got this hall tree to make going in and out a lot more convenient.

We’ve also made multiple $150+ trips to Lowe’s to get random things here and there.

That comes along random expenses like movers and moving boxes and all that other stuff. That’s on top of other life expenses as I had some medical issues that required some expensive tests and doctor visits.

All in all, it was probably the most expensive month of our lives. We had all of it saved in our bank accounts so it didn’t impact the monthly spend too much but it’s still a trip watching the savings account drain so quickly.

One thing to note when moving, movers are SO completely worth it and made the moving process a lot smoother. The amount of stuff they can carry in a short amount of time is impressive and I’d gladly pay the $600 or whatever it cost again to not have to move ourselves. They also stopped by our storage unit to pick up some heavy stuff which will making moving that stuff out a lot easier later.

December and the months ahead will be expensive(especially if the lease drags on) but I’m pretty damn glad to be in my new home and eager to start getting work on some updates. We’ve already painted the baseboard molding in all of the rooms which gave the house an updated look. We’ve also changed out the shower heads, cleaned a ton of stuff and have unpacked as much as we can.

I say we, but it was mostly my wife, the engineer doing all the mechanical stuff. She put together my desk, the hall tree and changed the shower heads and knobs. I stood around, picked stuff up and handed her stuff as she did the technical stuff.

It’s good to have someone in the relationship who’s handy and it’s certainly not me. I married well.

TEAMWORK!

We’ve got a lot of small projects ahead but really the house is already very livable without any major updates which is exactly what we were looking for.

2020 was a terrible year but it ends on a decent note with a nice first home we love and can grow in for years to come! A first home is a big step forward in our lives and I’m eager to start building equity in this home while we work to make it our own.

It’s an expensive month and will likely be an expensive year ahead but that’s what comes with home ownership. I’m thinking the lifestyle change and benefits will be more than worth it.