What’s in a house?
As we are beginning our adventure into searching for a house, we’re asking ourselves many questions. We have two sets of parameters; one for a new-build, and one for an older home. We’ve got quite awhile until we will actually buy a house and several goals to hit first, but that hasn’t stopped us from exploring our options to see what our goals should be. But if you really think about it, two years isn’t a lot of time – by the time we figure out what we want and get things in order financially, a year and a half will be over and we’ll either start the buying process with a realtor or with a builder, and our time will be up. Worst case scenario, we’ll have to wait an extra year because of work history to get a good mortgage, and we’ll rent for a year during that time and pay down more student loans.
Our price range will be $180k’s for a new build and $150k’s for an older home (allowing more leeway for repairs and remodeling). $185k at 5% interest for 30 years is just under $1k per month before taxes, insurance, and PMI if needed. This is not including our down payment, which will be around $20-30k. This means our mortgage payment would be around one quarter of our net income once Jason has graduated.
We could get approved for a much bigger mortgage (28% of our gross income at that time would mean a mortgage of $285k), but this is already a lot more house that we ever thought we’d be able to afford, so we’re happy that we can get a lot for our money in our area. Also, once our student loans are paid off (around 5 years into paying our house if we continue on the path we’ve started), if we contribute an extra $500 a month to our mortgage starting at month 60, we’ll have our house completely paid off by year 18, saving us over $68k in interest. Pretty awesome, huh? A loan at $150k with the same parameters is around $800 a month, so we’d have $200-300 to sack away each month for additional repairs besides our regular housing fund.
So what kinds of things do we like in a new home? We’re looking at multiple builders, but we went through a model home of the Ravenna by Ryan Homes and fell in love. We have family that have built with them recently and like the things they offer such as foundation moisture barrier as a standard feature. We had looked at several floorplans and felt kind of iffy about this one, but with a model so close, we took a look.
It’s perfect for our needs and in our price range in the communities where we are looking. It has four bedrooms, a dedicated “study”, a huge master suite with an upgraded bath and ridiculous closet. There is a formal living and dining room (meaning the front of the house will always stay nice looking if someone drops by), and an open family room/kitchen/morning room. There is an option for a finished basement, but we’d rather have that as a future project. Nine foot ceilings are standard throughout the house. We’d really want the morning room, and Ryan typically offers a free finished basement, but our family members didn’t want that either and they were offered the free morning room instead (which we’d definitely take, as it not only adds square footage to the first floor, but also to the basement as the foundation is extended, too). If we can get that deal, we’ll be able to afford the HUGE bonus room, which we would convert into a library and study area. We’ve already thought about the style of bookcases that we’d build for the walls :-). Our one major downside is the lack of land in builder communities – it may be best if we can sneak in at the end of a planned community so that we could purchase two adjacent lots, because almost all of the lots here are 80×160. We’d always imagined having land, so that will have to be a compromise.
As for an older home, we have a conundrum. The style of home we like is pretty hard to find in this area outside of the city. We’d prefer to live in the suburbs or outskirts, but anything not in the city generally wasn’t built until the 1950’s or 60’s. What does that mean? Little boxy ranches everywhere! We’d prefer a two-story, something with charm, maybe historic. Our absolute favorite are Brownstones and Victorians, but we also like some Colonials, Tudors, and Farmhouses. The few houses that are like this are either very expensive or right across the street from a rail line, and hardly any of them are for sale. If we did get an older home, we’d like to update and renovate it. We’d hope that there were no electrical, plumbing, or roof issues, but anything else is negotiable. We don’t mind knocking down (non-load-bearing) walls, putting in or refinishing hardwood flooring, completely redoing closets, drywall, bathrooms, kitchens, etc.. but if we’re going to pour our heart and soul into a house like this, it MUST be a house style that we like. Ideally, this older house would also be on some kind of land, at minimum 1/3 of an acre, but hopefully an acre or more. Sigh. Now do you see why this is so hard?
Whatever we decide, we’ll definitely want to try to look for our forever house.