Comments on: How much can we spend on housing?

By: Trixie

Trixie — Mon, 27 Apr 2009 13:45:55 +0000

Hi Kacie,

It sounds like you and your husband are really taking the time to plan this major life change. Kudos to you!

We live in a 109 year old farmhouse and our home owner’s insurance comes at $58 per month. A lot of the cost is because we live out in the country away from any fire hydrants. The insurance comapany is counting on a total loss if we ever have a fire — it will take too long for a pumper truck to get here.

Some ideas for your home maintenance budget —

My husband has a home maintenance and repair business and he deals with repair issues all the time. Most older (and many newer) homes have a lot of what you would call “defered maintenance issues”. This mean stuff that should’ve been fixed years ago is allowed to go on decaying and causing problems (think of an eternally leaking sink). Most older homes, unless they have been very well maintained and updated need a LOT more than $1,200 worth of maintenance each year.

Don’t let that scare you, though. Just be really aware of the mechanicals and structure of the houses you are looking at.

Take Care,

Trixie

By: Simplelivin'

Simplelivin' — Fri, 24 Apr 2009 18:17:57 +0000

I am so jealous! A condo in Eastern PA where I live starts at $140k! And then you have to factor in HOA cost. My husband and I would love to purchase a home, but we have to kick our debt to curb first.

By: Mercedes

Mercedes — Fri, 24 Apr 2009 13:57:50 +0000

As far as heating bills, how the house is heated has a lot to do with it. Back in PA we had an forced air oil furnace and was much cheaper to heat than out friend’s house. They had steam radiant heating system that is so inefficient. They spent tons of $$ heating their old home. So, type of heating system house has is surely something important to consider.

Mercedes

PS. sorry about typos in earlier post.

By: joanna

joanna — Fri, 24 Apr 2009 13:37:57 +0000

In the year and a half we've lived here, we've replaced a tile floor, painted almost everything, replaced both a storm door and an exterior door, replaced a couple light fixtures, built a bed & bookcase, added some other shelves, added garden edging, installed an invisible fence for the dog... little stuff that adds up. Start-up costs include buying appliances and yard/lawn equipment that you have no need for in an apartment. This summer we have a big project planned- re-siding the house- the vinyl siding is really old & has holes in a few places, hence our pipes freeze in the winter.... I have a very handy husband, so all these things he's done himself or with help from his family, so that's saved a LOT of money, but the weekly trips to Lowes are still a reality.

By: S.B.

S.B. — Fri, 24 Apr 2009 12:32:48 +0000

I think your homeowners may be too high. We pay about 800 dollars a year for homeowners and we have a good sized home with a large lot. I think you will find your number may be lower. When you are ready to put a bid in on a particular house, you can call your insurance agent – give them they address and then can run numbers for you.

I also agree that heating may be too high. With a few minor upgrades – your basic $19.99 programmable thermostat, sealing leaky windows and door drafts, new filter in the heater – you can control costs.

I think you could need more with maintenance. We’ve had parts break on our heater, the township flagged a broken pavement and we had to get it replaced, the wind caught the door and blew it off the hinges – odds and ends are always happening. But that is what you’ve got your emergency fund for….

By: Stacy

Stacy — Fri, 24 Apr 2009 12:30:04 +0000

Wow! The costs are so much lower there!!! NY is just ridiculous! Our rent is $1350 for our house and thats cheaper than a one bed apt nearer Tim’s work (and the city). And we live in an old, drafty house and had two utility bills that neared $500! And I keep our house at 65!!! And this house has needed a lot of work! Last summer the landlord had it painted and a new roof put on. And one day Tim was in the shower and about 20 tiles just fell off the wall! So crazy things can happen, but if you have some wiggle room I’m sure you’ll be able to take care of it.
Can you figure out an amount for your area where you’re throwing away more money in rent than if you buy? In theory if you’re putting more money into the house you’re hoping it pays off by selling for more than it’s worth. Ya know? But what’s the “breaking point”?

By: AnnMarie

AnnMarie — Fri, 24 Apr 2009 11:30:06 +0000

I’m also from WI and have lower winter bills like the other poster. $250 is the total of elec and gas at the most. Some imp details: we keep the heat at 68/67 during the day (when someone’s home) and 55 at night (only a few hours as we have a night owl and a morning lark in the family). We also have a 110 year old house. And the heat doesn’t got much upstairs (IE, we do not keep the bedrooms at this temp). We do use space heaters as nec but not a ton. We do have new windows, but ketp the heat lower before we replaced them so that kind of off set things I think.

We also did the 80/15/5 to skip PMI. It was worth it. And we paid off the 15 one within 5 years. (which was great because then we had 20% equity which we needed when the hold house ended up have lead paint all over and our kiddo needed it all abated) But anyway, I’d look into that. My DH did not have excellent credit, although I did, and we easily got one.

Be sure to also think about the yard and how the house is situated: You can change the interior of the house, but you can’t change direction nor where it sits ont he lot. I hate our north facing house. Only one south window (in a bedroom) so we can’t use the sun to heat the house in winter much. But we have a great side yard, 1/3 of which was turned into a garden. It was also already fenced, which was great when we got dogs and kids.

By: Jan

Jan — Fri, 24 Apr 2009 01:56:14 +0000

see if the seller will throw in a home warranty- that way if anything major breaks down in the first year you are covered!

By: Mercedes

Mercedes — Fri, 24 Apr 2009 01:23:12 +0000

These are some ouf our maintenance costs just this year so far:
washer has broken twice but hubby has been able to fix himself $100 in parts.
Water heater kicked the bucket $550 for new one and hubby to buy parts to replace it.
Lawn maintenance $250 per year. but lawn mower likely to be kicking the bucket soon (10 yrs old), estimated $1200 for a used one.
Fence maintenance: $250 to paint it again and another $200 to replace some posts that need to be replaced.
Siding: $550. To replace small section that blew away back in february.. So far this year we’ve had $1800 in actual expenses and it’s only April. There will also be landscaping expenses in the early summer. I think $100 a month it’s too late to build an adequate fun for unexpected home expenses without having to dip in your emergency fund.
Also, here are some commong expenses as first time home owners:
lawn mower (if you have any sort of backyard)
snow blower (or shovel) depends on how bug area and how much snow
tools: if hubby is handy and even if he is not he will need to get more tools for fixing things around. if he’s not handy then $100 a month is def. too low. :-)

Mercedes

By: Marybeth at www.babygoodbuys.com

Marybeth at www.babygoodbuys.com — Fri, 24 Apr 2009 01:14:47 +0000

We also did an 80/15/5 loan and it worked out beautifully for us. The 15 started as a HELOC, then we refinanced to an HEL that actually had lower interest than our primary mortgage. We were paying it down pretty aggressively, but when we refinanced our primary mortgage for an even lower rate, we rolled the HEL into it and continued to pay extra towards the principal.

Choosing a mortgage, then choosing if and how you want to pay it off is such a personal matter. There are tons of options, so it really pays to do your research (and you’re doing a GREAT job so far)!