(no subject)

[geminigirl]

This morning started with insomnia. Very bad insomnia. I think I finally fell asleep a bit before six AM. I slept about two and a half hours before Cayne woke me to ask me where papers he needed for the meeting with mortgage guy were. I had set aside some of them, deliberately. I hadn't realized he was going to want another set...a set which I'd asked him to label and put in my desk. After nearly an hour of looking, I finally turned them up, mixed in with some recipe magazines, on top of the microwave-a place where Cayne claimed to have already looked, after discovering that the papers weren't in my desk, where they belonged. At that point, there was little sense in going back to sleep before the meeting with mortgage guy.

We met with mortgage guy...for far longer than I expected. Mortgage guy who found us a way into the FHA loan has also found us a way to make a smaller downpayment. The difference between what our cost per month is expected to be with the large downpayment vs. the small downpayment is about $120 per month-not an insurmountable sum. We can also, of course, put down any amount in between. We're getting differing advice about what the best course of action is...put down the larger sum, you'll have smaller monthly payments, put down the smaller sum, and leave more available cash for yourselves in case of an emergency. And of course the part about how "You can always make larger payments than what's due on your account." And the truth is, I'd probably budget the same amount per month for mortgage payments, no matter what we put down. The real answer is that we have to do what we're comfortable with...but knowing that we've got to think about things like ptentially having significant home repairs because things blow up, and we know we're going to have to replace one of the cars soon, but if it's sooner rather than later, especially with Cayne having a daily car commute, which he doesn't now, we're going to need reliable vehicles. And there's also the fact that there are costs in owning a home that don't occur in a rental property, and we need to remember that we'll end up needing to take those on. So, we're thinking about what makes the most sense to do.

It pleases me that Cayne and I had reasonable fraud detectors going through this home search. Last week we met with someone from Barrington Homes about a town house development they were building in Winter Park, with fabulous pre construction prices. We didn't feel comfortable with the sales pitch; something didn't sit right with us, and so, in the car, on the way back here, we decided to pass on it. Then, earlier this week they shut their doors, and were sued by a bunch of their subcontractors. The woman we met with was in fact, on the news, weeping.

This weekend, no plans. It's too early to start packing.

Comments

[katbyte.livejournal.com]

Just so you don't have mortgage insurance in your payment. (PIM) That is a big waste of money and only helps the mortgage company. Usually you need 20% down or you pay PIM. I am not sure about FHA however. VA you never pay it no matter what you put down. $120 per month is a substantial amount of difference on a mortgage payment, IMHO.

[geminigirl]

FHA requires PMI until you've got 22% of the house paid for, I think. It's funny-I'm willing to consider an additional $120 a month for a mortgage payment, but the thought of paying that much (or slightly more) for rent was way out of the question in my head.

[melaniesuzanne.livejournal.com]

You'll be building your own equity instead of your landlord's.

Sounds like things are progressing well for you guys.

[geminigirl]

They are, thank you.

And yes, exactly...it's our equity, not someone else's. Plus it also means not having to listen to my neighbor's music in the middle of the afternoon.

[katbyte.livejournal.com]

Well this is partly investment for you. Different ballgame.

[barking-iguana.livejournal.com]

Wow, let's hear it for internal fraud detectors.

[wait.livejournal.com]

You can look at a mortage in terms of short term and long term risk and benefits.

Paying more now means you'll save more in the long term, but have less cash for surprises. Lots of people will tell you this is the way to go, as generally you can expect that your salary will go up over time as well, making this cushier over the years.

However, paying less now does not necessarily mean paying a significant amount more over time if you're very good about making extra principal payments. Check the details -- you want to make sure your loan does not have a prepayment clause that prevents you from being able to reduce the interest paid.

I think smaller payments each month are better. It gives you the flexibility to make your house into home -- $$ for furniture, plumbers and the AC repair people. During the first year, you'll have panic attacks about all of the misc costs. And as you do make more $$ over time, be dilligent in paying extra payments along the way. There are some very nifty calculators to tell you how much you save by making an extra $50 or $100 payment each month.