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It's Hard to Wait and I'm Not Sure I Want To

December 12th, 2015 at 04:02 pm

There are 3 very nice farms for sale right now. One is utterly perfect and two are quite doable. We have enough money for a 10% down payment on two of them and will have enough for a 10% down payment on the perfect one by the end of this year. And I'm swayed quite hard in that direction.

We would be able to afford the payments, all of our expenses, and still save a little each month. It would mean being a lot stricter with the budget. We've got a lot of play right now so that could be accomplished and we'd still have some breathing room.

We'd also be in our home for the first time since 2009. There is stress in living so long with my mother, even though I love her dearly and we get along quite well. I yearn to be able to have my own kitchen and do things my way and not have to schedule around her timetable, which is erratic at best and annoying at worst when you are trying to feed a family.

If we do this now, there are no ifs, ands, or buts about doing a 30 year mortgage. We would have to. I don't particularly like that idea, though, because we have only ever had a 15 year mortgage, and a 30 year mortgage would mean we could be 75 and 76 years old when it was paid off. Oh, I'd throw more money at it as we had it, but that would probably have us finishing at 65 to 70 years old.

The thing is, the practical thing anyway, is that if we buckle down and save super hard this coming year and throw everything at our down payment fund, we could have enough for a 20% down payment by December 2016. Which means we would lower our monthly payments significantly and have a 15 year mortgage. And it would be paid off by the time we were 61 and 62 years old, with no extra payments being made. With extra thrown at it, we might pay it off by the time we are 56 and 57.

The numbers make sense to wait out another year and save like the dickens. My head says that is the smartest thing we could possibly do. My soul says it is not quite sure it can cope with another year of living only in 1000 square feet with 2 teenagers and my husband. And only one bathroom.

We simply have no space. None. The house is very large, but this is the only space she allows us to use, plus we can cook in the kitchen (but must keep all our dishes and cooking stuff in our 1000 square feet). That frustrates me, too, because she has a huge kitchen with lots of cupboard space, two large living rooms, 4 bedrooms and 3 bathrooms for just herself. And two of those bedrooms are almost empty.

I am torn. I know what makes better sense. I really do. But it has been seven years. Seven very long years. And we wouldn't be struggling if we did it now. I feel like we are struggling though with the emotional part and being packed in like sardines. I want space. I want room to move. I want freedom.

I guess the thing I need to decide is what do I want most? Financial security is so freaking important to me. It is only one more year. Yet when I think about that year it is like a massive weight pressing down on my shoulders. One of these homes could be our escape hatch.

And 2 of them have open houses tomorrow. I will take my son and go look. Maybe in person they won't be as good as they are on paper.

11 Responses to “It's Hard to Wait and I'm Not Sure I Want To”

  1. PatientSaver Says:

    I strongly agree with your instincts to save for a longer period of time so you can do a 15-year mortgage. At age 45 today, you really don't want to have your back against the wall knowing you won't have a 30-year mortgage paid off til you're 65 or 70. That's assuming you can still work at that point. So much can happen between then and now, including unexpected job issues, health issues, illness, etc. You want to make your life easier as you age, not harder!

    Maybe it's time to have a talk with mom. Tell her you're bursting at the seams and could you have more of that unused space, for the last year you're there. Could it be she's completely unaware of how you feel?

  2. ceejay74 Says:

    If you're able to save so hard now, you'll be able to put that same effort into paying ahead on your 30-year mortgage. I would not blame you at all if you jumped the gun. As you probably know, we jumped our timeline by nearly TWO years and had to stretch mightily. It was a stressful year of getting where we wanted to be. But now we're so so happy we went through all that. We were in 960 square feet with three adults, two kids and a cat. It was doable, but seeing just the house we wanted made it nearly unbearable to wait.

    We plan to pay ahead on our mortgage eventually; at the moment I'm in no hurry, but I definitely want it paid off before I hit retirement age, so at some point we will begin to pay it off faster.

  3. creditcardfree Says:

    I honestly would buy in your situation. One can refinance. Emotional health is just as important as financial security. Keep looking at the numbers and see if there are other options.

  4. Carol Says:

    If you find one that's perfect, I might jump. Yes, you can refinance,and you can also do a 20 or 25 year. It's remarkable how satisfying your own place can be, especially for someone who likes to farm the way you do.

  5. Livingalmostlarge Says:

    I'm torn. Sometimes like comes along and you go with it. What are the numbers? Are you willing to share? If I could see the numbers perhaps others could give idea about whether you should do it.

    The refinance is an option. Another option would be to do a adjustable rate mortgage for a few years and then pay it down and refinance. There are many ideas to toss around. An adjustable might be a long term play to keep refinancing because the amount saved on interest can be paid towards principal.

    Did you know in canada there are no 30 year fixed mortgages? Most are adjustable and change every year. But in canada lending laws are more strict and many people pay off in 10 or 15 years. So they don't over buy. So adjustable rate mortgages aren't the problem. It's people using them incorrectly and buying what they can't afford.

    So it's worth investigating and running the numbers. I also might add maybe the properties aren't perfect and you can wait for the perfect place. But only you know once you see it.

  6. LuckyRobin Says:

    One of the homes is $369,000, the other is $339,000. We would qualify for the 3.5% interest loan at our local CU as we have no debt and a very high credit rating in the 800's. 3.5% would be for a 30 year mortgage. For a 15 year mortgage we could qualify for 3% interest. Payments on a 15 year mortgage with 20% down would be around $1300 to $1400 a month and payments on a 30 year mortgage with 10% down would be around $1900 to $2000 a month. We have $3300 a month that we can dedicate to housing, but that would include all of the utilities and internet. That would leave us able to save about $400 a month beyond what we budget monthly for medical expenses ($800), animal feed ($150), and groceries ($800, but some is saved each month towards buying 1/4 of a beef or 1/5 of a hog).

  7. Livingalmostlarge Says:

    Talk to a mortgage broker. What will an arm rate be and what will it cost you?

    How much are you saving for retirement? Is the $3300 for all housing costs or is some of it dedicated to other savings? What's your big picture look like? You are 45 and what are your retirement plans? Is $3300 entire budget or how much more are we playing with?

    If you got a 5/1 or 7/1 arm at 3.125% on $300k your payment is $1285 (bank of america). We'll keep out property taxes and insurance since it's all the same. It probably caps out at 9.125% or 6% limit with 2% a year so worse case scenario is 9.125 after say 10 years.

    Without paying a penny more you will have paid in 60 months it down to $266k according to amortization calendar. Refinancing down to 15 years in 5 years @ 4% puts you at $1900/month. Let's assume you instead pay down and extra $500/month = $1800/month for 60 months $233k balance on Arm in January 2021. Same mortgage refinanced to a conservative 4% 15 year mortgage is $1723.

    Now there are things to consider, you have to watch rates for the next 5 years and if it drops contact mortgage broker and use them for a no cost refinance. How likely it is you can pay extra a month, etc.

    I've done arms for over 13 years and might not ever do a conventional 30 year again.

  8. MonkeyMama Says:

    LR, I think you have your numbers switched on the loans. I was initially thinking the 30-year sounds much more reasonable. I don't like 15-year loans in that it allows less flexibility when things go sour. If you lose a job you are stuck with a huge house payment. You can always pay ahead on a 30-year loan during more prosperous years.

    Anyway the 15 year will be about a $2k payment but the 30 year will be in the $1400 range.

    Buying so much house at this stage in your life is a huge financial commitment. Does it really make any difference in the grand scheme of things if you do it now versus one year? If you are going to do it anyway, I don't see that it would make that big of a difference.

  9. LuckyRobin Says:

    MM, Yeah I think I did scramble the numbers.

  10. Kiki Says:

    How did the open houses go? Did anything look practical for you?

    Have you run your numbers with a broker yet?

    Do you qualify for any of the down payment grant assistance programs? I received one when I bought last year that I didn't think I would ever qualify for at a salary of 80k: a grant for 3.5% of the price. I have to pay it back if I sell within 5 years. It is worth checking out.

  11. klarose Says:

    If the house really is perfect for you, I'd go ahead and jump. Bad living arrangements can really wear on your quality of life. Besides as others have said, you can always refinance later.

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