Turns out I will need 2500 for my part of the downpayment on the townhouse by the beginning of June. I will get a portion of it back, but the exact amount is yet to be determined. It all depends on what is leftover after our moving expenses and painting and other minor bits and pieces. It’s only fair since I have lived pretty much rent-free for a few months and had my bills covered.
Four pay periods left and I have 2100 to go. 525 each paycheck. I can do this. Bumping up my weekly allocation to 262.50 from 200/week. Moving into a townhouse, I’m viewing it as an investment in my future. Was kinda pissed at first, but discipline is key to reaching any goal. 🙂 I’m thankful I have a job to pay my bills and it’s a good one.
In my last post, I mentioned my partner and I are in the process of buying a townhouse. We don’t have a whole lot of money saved for a down payment, but needed to have the deal closed before July 2012.
Why the heck would someone in over 40,000 in debt be a coborrower on a mortgage for a townhouse?
- Closing Cost Benefit – Since we moved, as part of our relocation package my partner’s company will pay for closing costs provided we close by a certain date. Value: $2500.
- FHA Qualification – We did an FHA loan, which only requires 3.5% down by closing and before April 1st only required 1% of the value. 20% down would be ideal, but with our incomes / rent I don’t think it’s realistic.
- Rent – We live in a nice apartment, but it is $1300/mo. Round up to 16000/yr just for rent with no equity. Our mortgage will be under 150k. In 10 years at what we pay now, the bulk of our townhouse would be paid off. We also pay for gas each month, for our hot water heater and a fireplace we never use, adding about $40/mo to our bill.
- Utilities – Our electricity bill in the summer time is between 200 and 300 per month for July and August. One of the downsides to living in a 3rd floor apartment with lots of sunlight / poor insulation. This townhouse has a new HVAC unit, energy efficient appliances and lots of shade.
- Space – The 1300 sq footage for our place is fine now, but 1800 is much better especially when friends or family come over. It also has 3 bedrooms vs 2.
- Housing Market – Sure it could get worse, but I don’t think it can go much lower than it is right now. Our complex will likely try to raise our rent after this year is up by 100/mo.
The property has been fully inspected, passed with the exception of some electrical issues (not up to code, couple thousand to fix) the seller has agreed to fix before closing date and minor roof work we are going to have done for ~$200. Like most properties in the area, it has had foundation work done recently. In New York that might be a red flag, but in Texas it’s business as usual.
I believe our mortgage payment will slightly lower than our rent right now, including homeowners insurance, taxes, pmi and interest (~3.65% rate iirc). My partner could afford to pay for it all on his salary, but we’re doing this together and are in it for the long haul. I am definitely looking forward to buying a home. Before we moved I never would’ve thought it was possible. Definitely not on Long Island where property values and taxes are twice as high as Dallas….
On my way to work now, but will update more soon.