The laws of physics make this an excellent idea, particularly if you know how to defy gravity.
Oh yeah. I’m the person who just yesterday caught my shoe on a blade of grass and slid through the front yard like a baseball player heading for home. But when it comes to the laws of physics and big holes, you work with what you’ve got.
Also true with real estate.
You may be wondering how the fiasco with the appraiser last week turned out. The short answer is, it turned out okay. I’m going to end up selling the house for just under what I bought it for almost 6 years ago– and the buyers and I had to work out some very creative financing deals to even manage that.
Which, by the way, is ten-thousand dollars less than we agreed to sell it for. And by “agreed to sell it for” I mean, the buyers wanted to pay that amount and would have if it wasn’t for the appraiser. Not that I would want to sell the house for an unfairly high price– just the opposite, in fact. The original purchase price didn’t even begin to cover the updates I’d made to the house, but it felt fair to all of us. And ten-thousand less is an unfortunate reality of the real estate market. I’ve vowed to make that money back in the next 2 years with the skills I’ve learned by owning this house, and then I’ll call it even with the real estate gods.
The good news for us is that six years ago my father looked me dead in the eye and threatened to disown me if I signed a thirty-year mortgage. And was all, “but dad I don’t have the money to make double payments!” And yet the man is somehow able to drive fiscal responsibility into my brain by staring blankly at my forehead, so I sucked it up, stopped buying designer jeans, and dumped a lot of money into paying back my mortgage.
If I could offer one bit of advice to everyone out there– none of whom will listen to me because I don’t have the financial-death-stare my father does– it would be to only borrow on a 15 year mortgage, and pay it off in ten or less. It’s going to be hard, and both of us will have to sacrifice, but so help me God, MysteryMan and I will pay off the debt on Memorial before we turn 35.
As for the sale of Garrison, we will still come out of this deal financially stable. We’ll be able to finish Memorial, and the Garrrison house will belong to a wonderful couple who appreciate all the work that’s been done to it. In these economic times, we couldn’t ask for more than that.
Sound advice. So many people don’t set paying off their house early as a priority because, in their minds, it’s not even in the realm of possibility.
But it can be done.
We’re paying for my husband to go through U of Michigan’s MBA program (not cheap) cash. We’ve paid over $20,000 extra on our house so far 2010. We built and closed on our house Thanksgiving of ’08 and I plan to have it paid for in 2013. Neither of us makes 6 figures.
It can be done.
Love your site.
Wow, that really stinks that appraisers feel they can intervene like that. Especially because you and the buyers are financially responsible. Too bad all the fools out there ruined it for everyone by foreclosing left and right! It’s really good that the whole thing is over, though.
I wish we could’ve taken a 15 year mortgage, but we just enjoy the fun stuff too much to tie up all our money in house payments. And with a 15 year, if you lose your job or something happens, you have no flexibility to pay less. Having a house paid for when you’re 35 is great, but not worth it (to me) if I spent the last 10 years not going to movies or restaurants, not buying that Pottery Barn rug I love, and giving up cable. I’d rather enjoy those things and have a smaller house payment for a longer time. We do make overpayments every month and put 11% down on the house, which was a lot more than most 20-somethings were doing. Plus, having a paid-off house means you can’t itemize and miss out on other deductions like mileage reimbursement and charitable donations, which we both claim every year. And when your mortgage is cheap (4.875) there really isn’t any reason to rush, especially considering that inflation cuts your interest savings significantly because it is spread out over future years where a dollar then would be about 50 cents today. Can you tell I’ve gone over this a thousand times?? Anything to justify a new rug, seriously. HA!
That’s too bad – I mean, you’re being fiscally responsible, dealing fairly with the buyers, and it still feels like you end up with the short end of the stick. I agree with you about paying off the mortgage quicker. We’re on a variable rate mortgage and since rates have been so good the last few years, we were able to pay more of the principal down. I didn’t realize how much faster we were paying down – until I went on maternity leave and my hubby got a pay cut due to the recession and we had to adjust our payments and extend our term. Paying more now may mean you have to sacrifice some things today but it also lessens the risk and burden for future. Just think, if you pay Memorial off by the time you’re 35, you’ll just have that extra money to put into your kids’ education funds.
Carmen – You’re totally right, it’s all about commitment.
Sara – I totally hear ya! Of course, it’s a personal choice and a lot of things factor in to it… imagine the rest of your life without that mortgage payment though. You could be swimming in Pottery Barn rugs. lol.
Wanderluster- College funds? I was hoping I could just take a lot of vacations! lol. We’re not quite ready for a little one just yet, but yeah, that’s the idea.
I agree with you. My hubby and I took out a regular 30 year mortgage but we paid double and sometime triple payments on it, also applied any extra money we received (like tax returns or bonuses) and paid it off in about 10 years – well before we turned 40. Of all the things there are to worry about in this economy, I’m very grateful to know that a “roof over our heads” ain’t one of them!
You are either rebuilding the house or renovating the old one. If you fall from here you may get injured.