Progression of a Homebuyer...

Ahh yes - there's something I can speak on.

I've always wanted to own a house - a place of MY own, but my deep gut resistance of getting into enourmous quantities of debt always held me back.  Several people told me to look at it as an 'investment' - something you buy to live in, with the assumption that you are going to sell it a few years later and make a crapload more money off of it than you initially spent on it. Hm. Okay - that makes sense, but something in my enternal bullshit-o-meter was still pinging. As I started looking into the housing market, I realized what it was - every bubble has GOT to pop sometime. No constant growth rate is sustainable - at some point, the growth has to stop - and the dying has to start. So - I am deeply uncomfortable with the concept of buying a house for an 'investment'. With that out of the way however, oddly enough, I became MORE enamoured about buying a house - because by discarding the concept that I HAD to buy for an investment - ie, had to buy something that would be easily resellable - I could EMBRACE the concept that I could buy something suited to my own particular peccadillos, and NOT have to worry about flipping it at some point. A long term mortgage became more attractive - when I started looking at it like rent - the simple fee that you have to pay to have a roof over your head, and not as a tax write-off, or a future investment. I could look at houses as if I'm going to live (and hopefully die) in the same house.

Of course, first I had to find a city that I could actually SEE myself living and dying in - and so far, I'm feeling Memphis. Next - comes the price calculation. Based on the money we are bringing home right now, we could most likely close on a 265K house (if we found one that we liked) by - oh, say February. The mortgage would be a stranglehold on us, and if one of us lost our job, we would be screwed in a matter of months. After looking at houses, I realized, that I don't WANT a house that's over 200K - after a certain point, house prices go up because of all the stuff that's in them - the marble foyer and the granite countertops and the burnished oak banister and the in ground pool and - blah, blah, blah. I don't NEED - nor really WANT all of that crap. If I wanted to sell the house to someone else, it MIGHT be a good investment. If I plan on keeping the house - *shrugs* even my chef of a husband doesn't drool over a granite countertop. So - looking around - at the current market in Memphis - I realized that we want a house in the 100K-120K range.  And, after looking at amortization rates, I realized that a 30 yr loan is - insanity.  For a ten year mortgage, with a 5.75% interest rate you end up paying the principal, plus 30% for interest.  For a 15 year mortage, it's principal plus 50%. For the 'classic' 30yr mortgage - ASSUMING (as it seems few people do) that you will actually pay OFF the mortgage - you will end up paying DOUBLE the 'selling' price of the house before you own it.  Say WHAATTTTT????  Um, no? Of course, if you also assume that the housing market is going to continue to go up, up, up - it might not be such a bad tradeoff, right? But if the market stagnates, or heaven forbid, the bubble actually pops - you're screwed in a house that you owe more on than ANYONE in their right mind would buy. Humph.
So - our goal is a 120K house, 15 year mortgage. The more of a downpayment that you have - the less the mortage is. The less the mortage is, the less interest you have to pay on the property - and the faster you can pay it off. I'm actually hoping that we can get a house for around 90K, and considering our requirements, I think it will take just a bit of 'right-timing' to get it......

1. It's GOT to be on at least 1.5 acres of land - the more, the better. Real land, not development hell (like those McMansions in Germantown - sweet JESUS save me!)


2. It needs to have a good roof...


3. a good foundation...


4. good plumbing...


5. and mostly decent wiring.


6. At least 3 bedrooms (I think 4 would be best, though I wouldn't frown over 5)


7. At least 1.5 baths


8. No housing association


9. A basement would be nice - unfinished is fine.


10. And a gas stove, for my beloved husband.


11. Needs to be within 30 minutes of our jobs (we'd take 40 for a REALLY good deal, but nothing further out)


12. Trees. Gotta have trees. Lots and lots of trees.

And that's about it. We plan on putting a LOT of sweat-equity in the house - I really don't care if the carpet is ugly, and the cabinets are from the 70's, and the wallpaper looks like something from hell - *shrugs* elbow grease, and actually having enough liquid money that ISN'T tied up in a mortgage will make it a much - simpler process to create OUR 'perfect' house than trying to buy the 'perfect' house up front.

And since I still plan on quitting my job at SOME point - the mortgage that we have HAS to be small enough for a single income household - and the bigger the downpayment is, the easier that will be. And - if all goes well - by mid 2007, we will have about 40K for a downpayment/closing/inspection/moving and all the other up front money that is needed for a house.

So yeah. That's why we aren't rushing into buying a house.....I don't want to have to regret it.