Year 2 of Home Ownership
Owning my first home was a dream come true. We are in year 2 of home ownership and have learned a lot.
– An older home is exactly that, older. Everything seems to break or I seem to break it somehow. Expect for an item to break every month or so. I started budgeting an extra $100 for home improvements, but in reality this $100 is being used for maintenance. So when you are budgeting for your house, think holistically. Mortgage + property taxes + home insurance + maintenance + renovation budget.
– 15 Year Mortgage vs 30 Year Mortgage – I think one of the best decisions we made was choosing a 15 year mortgage over a 30 year mortgage. Yes, it means our budget is tighter every month because our payment is higher, but it also means we will have our house paid off way faster. Actually as of right now we have 13.5 years left in our mortgage. Sounds way better than 28.5!
– Less House – Since we chose to go with a 15 YR mortgage, it meant our home budget price was lower than most. If you are going to choose a 30 YR mortgage, you can usually “afford” to buy a more expensive house because your payment for a 30 YR mortgage will be similar to a 15 YR payment, except you will pay an extra 15 years of interest on the house. By buying a more affordable house, our loan was smaller, even though I wish it had even been smaller. I definitely get jealous when I see my coworkers’ new build homes with upgraded finishes, but I take in stride, and figure out how can I implement at my house DIY. If I lose my job, we can keep up with most of the bills with hubby’s paycheck for a couple of months at least.
– Endless Projects – I guess the fun part is I have an endless list of projects I want to work on around the house. Time and money are always limiters. Well, money is what usually slows me down. I’m still renovating my kitchen one year later because I’m doing it myself on a budget. Additional projects we need to tackle: Redoing flower beds in front yard; laying down pavers in backyard, master bathroom renovation, etc. All of these projects are pricey and I need to save up money as well as figure out how I’ll tackle the projects myself.I, also, have to consider there’s only so much my house is worth. So I can’t invest $20,000 when our house is only worth $150,000. Not that I have $20,000 to invest in the kitchen. I have champagne taste on a beer budget.
– Home Price Experience – I also learned we most likely over paid slightly for our house. I think we should have negotiated an additional $5000, at least, off purchase price to cover all the work the house needs done. But the market in Dallas was starting to go crazy when bought our house, so we did not feel like we had a lot of leverage. Looking back we should have bought the year before, we would have paid less and our interest rate would have been even lower by half or a full point. But hindsight is 20/20. The market continues to go up in Dallas, home prices are increasing every day.