The Decision to Buy a Place: Looking Back
It’s funny going back in time to read the posts I wrote while we were looking for a place to buy. Not that we’ve bought our first condo, it puts things into perspective.
First of all, there was a lot of pressure to buy something. Not just from our broker, but hearing the phrase over and over in the news made us feel like we were this close to losing out on a fantastic opportunity.
When I wrote about whether or not it was the perfect time to buy, I noted a few reasons to support the statement:
- Prices were coming down every week
- Rates were at historical lows
- The Obama tax credit for first-time home buyers
How did we do with these three elements? Well, the price we got on the place we bought was really good. Not surprising since everything has been coming down in price over the last couple of years. But we managed to score a place that looks brand-spanking new (the inspector’s words) at a price that’s almost too good to be true.
I almost feel bad for the previous owners.
Almost.
As for the rate we got, it isn’t nailed down yet. It won’t be higher than 5.125%, but our mortgage guy says if rates come down from here to closing he might be able to get us back down to 5%. Either way, that’s still awesome compared to recent history.
And as for the tax credit, we will qualify for it and use it to replenish our savings. This is a HUGE for us psychologically because we worked really hard for a long time to save up that money and the peace of mind that comes with it.
After the down payment, closing costs, moving costs, paying to get out of our lease, and all the other ticky-tack expenses that add up, we’re going to need this money in the bank to feel better and more at ease.
When I wrote about not having “enough” money to buy a place, I meant that I didn’t have the 20% to put down that a “responsible” home buyer would have. Most of the mortgage guys we talked to exhorted us not to put more than 10% down if we didn’t have 20%, but we went with 13%.
That means we’ll be paying PMI but not for long—we should be able to get rid of it within five years (knock on wood).
Looking back on the two-year process, we couldn’t have done it any better. We were patient, we got exactly what we wanted at a fantastic price, we got the tax credit, we got the low rate, and we’ll be under the responsible threshold of 30% of our gross income devoted to housing costs.
Patience is a virtue that is rewarding us very nicely right now.
