Last month (February):
Years left: 1.083333333
P =$1,152.47, I =$61.93, Escrow =$809.48
This month (March):
Balance:$13,336.01 (actually it is 13,336.21 because wells fargo occasionally steals pennies)
Years left: 1
P =$1,157.03, I =$57.37, Escrow =$809.48
Amount saved from prepayment: $0
Hey, look at that, only one year left!
About 10 years ago we bought a 3000 sq ft house. Why?
- We had been living in small urban apartments and were dying to have more space. Our master bathroom is literally the size of our first efficiency. We had no concept of say, how 2000 sq ft would be. We only knew small and that large sounded great.
- We were sick of moving and didn’t want to move again unless we were leaving the town for new jobs (in which case we wanted to be able to unload the house quickly).
- We thought we wanted a 5 br house so that there would be one bedroom for each of us and we’d also each have a study. (We actually have a 4br plus study.) We did not realize that we miss each other when we’re working in separate rooms and thus do not need our own studies. (And DH has plenty of room in one of the walk-in closets to keep his boardgame collection, so he doesn’t need a separate storage room like his father has for hunting equipment.)
- We had 55K saved for a downpayment (enabling us to get a 265K house using the 20% down rule plus fees).
- I had a salary that would enable us to buy a 300K house (give or take) according to online calculators, which we knew was probably too expensive, but 265K seemed pretty reasonable.
- The monthly payment on a 30 year 6.5% mortgage was less than what we were paying in rent in the city.
- We told the real estate agent that the most we could afford was 265K, so he had incentive to make the nicest house we saw a little more than 265K. Then the other real estate agent was informed that we could only afford 265K (I imagine, I’m not actually sure). So we offered less than that and they countered with 265K and we said ok and didn’t move on to our second choice somewhat smaller 250K house.
3000 sq ft is too much. It is expensive to air condition and clean and keep the lawn mowed. We just don’t use about a third of our house because living in nowhere, nobody really visits us now that DC1 is no longer the only grandkid (oddly, we had plenty of visitors on the couch of our small apartments in grad school city!)
If we had to do it again, we would look for something more in the 2200sq ft range. 1200 sq ft, which is what we’re living in right now, is a bit small for the four of us. If we’d gotten a starter home we probably would have ended up staying in it. But we didn’t realize.
Why don’t we sell and buy a smaller one now? Mostly because the amount we would save by cutting out say 800 sq ft doesn’t seem worth it to us with the hassle of moving and transaction costs. And we do like the neighborhood, although the elementary school zone changed on us and now sucks (we’re hoping DC2 will get into the dual language program if zie doesn’t start K early). It’s also now a seller’s market instead of a buyer’s market so while it would be easy to sell the place, it would be much harder to find a new place than when we first moved out here.
So, the moral: Just because you can afford a big house doesn’t mean that you should buy one. More isn’t always better.
How did you decide what size house to buy/rent? Do you always get the best and biggest that you can afford?