As our more loyal readers know, Mrs. BP and I will soon be closing on our first home. You also know that we already have six figures in student loan debt to be repaid.
We bought a very modest home and intend to stay there, hopefully for the rest of our lives. We have been renting for ten years now and have lived in at least three different local regions (Philadelphia, South Jersey, North-Central Jersey) counting college, and we like the idea of settling down and developing roots somewhere. We put more than 10% down on the house and still have a decent amount of savings left. (i.e. more than $10,000).
Yet I’m scared. Terrified actually. Maybe we should have waited. What if one of us loses our job? What if one of us gets sick? Even with $1,500 per month going to the repayment of student loans, up until now we have been living on one salary. What if the house is a lemon? The inspection came back nearly perfect but it is an old house.
I am a control freak and I am freaking out about how little control I have over our future. I guess that is just life.
Sometimes I worry I’m not developing as fast as I would like to at my job. Maybe I should have waited until I was more settled in my role before buying a house.
Other times I feel like the act of taking on more debt for this house will kill any shot I have at walking away if I need to. Or starting my own firm one day. I know that the more obligations you have the harder it is to walk away.
The interest rate was low and the house price is inexpensive compared to what it was just a few years ago, but who is to say the market will ever come back? Houses may just keep decreasing in value. I read the other day that another 20-25% drop is not inconceivable.
I’m not sure when we will ever be able to start saving money for our retirement the way we’re supposed to. It seems like every time we catch a break something comes up that we’re supposed to be doing. Right now we are “supposed” to buy a house. If we are lucky to survive this step and start getting comfortable with our finances again, then we will get to the point where we are “supposed” to have children.
We are very lucky to have jobs in this market, but we are last in and we could be first out. Nobody’s job is secure so long as you work for someone else. You’re always just two short words away from having your world turned upside down.
I know since we blog about personal finance sometimes we are perhaps supposed to have our act together. We try our best to read up on personal finance and start a conversation on our site. It has long been a hobby (obsession?) of ours and mine in particular.
However, the fact of the matter is sometimes we have no idea if we are making the right call or not. Right now is one of those times. This house deal might blow up in our face. At the same time it could be a positive change in our lives.
Only time will tell.
Sometimes I think we are crazy to take on more debt when we already have so much. We took a 15 year mortgage and we have 8 years left if we make consistent minimum monthly payments for most of our student loans.
I like to think forward to a future when we are in our early 40′s and have no student loans and no mortgage payments; but we will need a lot of luck and for everything to go right to reach that point.
Sorry this is more of a personal post about how I feel. It’s just on my mind all the time and this is the best outlet I have.
Maybe I am simply having cold feet.
I wish I was more settled so that I could be absolutely happy about moving into our first home. Truth be told a large part of me is very excited.
But the rest….well, I’m simply just plain scared.
Very scared.
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Congrats Team BP! Relax and focus on the positive side. You are buying a home when interest rates are at historic lows. It can’t get better than this.
Remember, home prices can’t stay depressed forever.
Thanks. I definitely need to chill. I am going to give myself an ulcer. (Although one or two of my clients may be a contributing factor to that).
Some people don’t find the idea of buying a house scary at all. Even if they have no reserves, are squeaking in with their credit or are only planning to stay in their house a short time. As a housing counselor, those are the people who keep me from sleeping at night.
To my fearful clients (and to you) I say that the fear is a side effect of making good and careful decisions. The fear is a sign that you considered everything very carefully and that even a change in your circumstances, while stressful, won’t ruin your life. The kind of people who are scared when they make a big decision don’t worry me at all. I’m sure you’ll do great.
Good luck! Oh, and my other tip to first time home buyers? Take up yoga or meditation. You’ll need it.
Lol. We’ve already started deep breathing exercises. Yoga sounds like a good option as well. Thanks for the comment. I, like Mr. BP, am scared but feel we have been cautious enough to warrant some enjoyment throughout the process.
Good luck!
Unless you’re seriously considering backing out, then you’re worrying about a sunk cost and there’s not much you can do about that. All you can do now is bulk up your emergency fund so as to be prepared for any eventuality.
I recommend not going out and buying all new furnishings until you’ve lived there long enough for the major things that are going to break to break. (For us this was a couple of months.) A big mistake a lot of people make is overextending themselves on new furniture, and then having to put the inevitable home emergencies on credit when the water heater blows up or the sump pump breaks or the gas pipes outside the house get a leak (all real life examples). Furnishing the guest bedroom is a later priority.
Also, 40 will get there sooner than you think.
You are so right! At first I thought about all the items I wanted to buy, but then realized that it doesn’t all have to be done at once. My parents have owned their home for 20 years and continue to upgrade and update. It will be difficult to resist new bedding and paint colors, but I will try my hardest! However, Sophie our dog is absolutely demanding a new bed for the new house (we may have to comply). =)
Hah! Unless you’re seriously extravagant, I doubt a dog bed will put you into deep debt.
Wow, that brings back memories to when hubby and I bought our house 14 years ago. We were going to double our ‘rent’ payment (but had no other debt). We were frightened little kids. But, we are thrilled we did it! everyone has second thoughts once you sign that dotted line, It’s a scary thing to go into. As long as you budget wisely, think calmly and even borrow a few things from your neighbors from time to time, you’ll be fine.
(by borrowing I am referring to the 26′ extension ladder we use twice a year to clean the gutters. If you will need an extension ladder once or twice a year and your neighbors have one, see if you can borrow it rather than purchasing one and storing it for 362 days when you aren’t using it!)
When I start spinning out like your doing I play the ‘what if’ game with myself. What if one of you loses your job? Answer: ______. I just keep answering each of the questions. It makes me feel better even if I spiral out to living on a street corner with just the clothes on my back. Typically though I realize that poopy things happen in life, I can’t control everything, but, I’m much stronger than I’m giving myself credit for in the moment of panic.
This is great advice. I think I do something similar. Once you answer the “what if ?” questions one by one, you somehow remove their power over you. 99.9% of the things we are afraid of never happen. But somehow they still manage to rob us of so much joy and mental energy.
Temi:
I have never thought of it that way. “99.9% of the things we are afraid of never happen. But somehow they still manage to robu us of so much joy and mental energy.” That may be my new mantra.
Just want to clarify that I currently do not have a mantra, so it wouldn’t be replacing anything. I want to keep that line in my head though for when I start to worry about things. What’s the point in letting things out of your hand rob you of joy in your life. What will be will be. I like that a lot.
Out of curiosity, why a 15 year note? When I have taken out a car note in the past I would figure out how quickly I wanted to hit pay off and adjust my minimum month payment, but take the loan for the full five years. Alleviated my ‘what ifs’ because if I lost my job, or if the car was a lemon, etc. — I would be ahead in payments.
We went with a 15 because the interest rate, when compared to the 30 year, was so drastic that we end up only paying approximately $200 more a month but are cutting it down by 15 years. For us it made sense. We thought about just “paying more” but realized that in the past life has gotten in the way and we haven’t always stuck with that rule.
I think the 15-year is a smart way to go. Sure, people tell themselves that they’ll pay of a 30 in 15, but it is a rare occurrence, and banks know that. Make large payments now, and save yourself all of the interest you’d be paying on a 30!
It was only an extra $200.00 per month because the interest rates were so different, so that was the key. I agree that people will often tell themselves they will pay down more, but it is tough to get in that routine if you aren’t forced to. I guess the key is analyzing each specific deal, but once I saw we could qualify for the 15, even though we are cutting it close to begin with, I figured let’s try it. Hopefully it works out. lol.
You are going to be ok. Tell yourself this. I am not promising that their won’t be bumps along the way but you two will figure it out as you go. Things will work out somehow.
Change is stressful and terrifying even when it is good. The reaction you two are having is completely normal. Allow yourselves time to adjust and remember adjustment happens at different rates for everyone.
You are investing in your future and making it better which is something you can be proud of. Don’t let anyone or anything take that away from you.
You are going to be ok but hollar if you need anything.
Thanks Miss T. Your right, all we can do is hope for the best and keep working hard at saving money.
Fear is a good thing when it keeps you from making crazy choices, but homeownership – while somewhat scary – is not crazy. I think paying money every month to a landlord with nothing to show for your output at the end of 10 years is sort of crazy (no offense intended). Where did all that money go? Even if the value of your home doesn’t increase, in the end you still own something of value — even if it is just the land your home sits on. Have faith. It sounds like you’ve done your homework and are making a wise choice!
Hiya Mr. and Mrs. BP
Please check out our last 2 LONG articles.
I bought my first house before I even met Mrs. SPF! One salary …
If we can help you alleviate concerns, drop me a line via email.
Cheers,
SPF
I have a feeling these articles will be finding their way into my weekend reading list. Thanks SPF!
By the way, it’s been too long, I have been meaning to drop you a line anyway. I have been working ridiculous hours lately and I feel bad I haven’t been able to comment on others sites, etc., as much as I would like recently. Today I worked 5:30 a.m., to 11:00 p.m. Tomorrow I will be back in again. That said, law is very cyclical in terms of busy times. Right now I feel blessed to have plenty of cases taking up a lot of time. Congrats on all the success over at your site, you guys deserve it and I have been “lurking” quite a bit over there, although like I said I haven’t been commenting like I should. Thanks again for the heads up.
Those thoughts you have seem to be totally normal and understandable. But based on what I’ve read from your blog – including this post – I’m guessing that you’re going to be just fine and have probably made good decisions – including the house.
Thanks for the encouraging words. We made some bad decisions regarding getting into so much student loan debt. The house might turn out to be another bad decision. I guess I could always take on a second job but who would want their attorney delivering them pizza over the weekend. Plus then I wouldn’t have time to blog, which i really like.
It’s always scary in the beginning, but in 5 years, you’ll realize how affordable it is as incomes grow.
Congrats on the house! We had the same feelings as the closing date approached. We ran the numbers, but as it’s a big steps, we kept reviewing our decision. A year later, we’re happy with our decision. Best wishes to you two on your own journey!
thanks Elle! Hope we are as happy as you guys are!
From past blog posts, seems like you both carefully weighed the options and made a rational decision. Second guessing is normal, but too much of it will drive you nuts.
As for furnishing the house, yard sales and country auctions all the way.
i have like an unnatural fear of bed bugs that makes me more afraid of doing that then I used to be. I agree what is done is done, no sense worrying about it. Of course I still can’t help myself. Most of me is extremely excited though, despite the worries.
Hi,
You overwhelm yourself so much, just like me. But that’s ok. You will get over it. Can I ask you what was the interest for the 30yr mortgage and the 15 yr rate you got? Also, who is the lender?
Thank you for your response
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