Monday, March 12, 2007

Well. Oh, crap. I was getting ready to write about the fact that we seem to be negotiating to buy a house, but coming back to this page reminded me of the last thing I wrote about -- that buying a house is going to be harder than we thought.

Okay, I'm going to talk about numbers. That's okay, right? No one is reading this shit, and presumably if you are, you don't know who I am. Right? You'd tell me. I trust you. Okay. So let's say we end up buying a house for $375,000. Let's say losing costs are 5% of that -- that comes to $18,750. Whew. Then we need a down payment. Good lord. Now the thing is, we have the money to do this -- it's not like we're not going to be able to buy this house. We can do it, assuming changes in the market don't make it so we can't put down 5%. (I understand that riskier mortgages -- ones that aren't your conventional 30-year fixed with 20% down -- are becoming an endangered species.) A 5% down payment would be another $18,750, for a total of $37,500. (Oh yeah. Duh. That's 10%.) Yowza, but we can do it. Now what if we were to do a 10% down payment? $56,250. If we get together all the money we have at our disposal, we can do that too. We don't want to completely deplete our savings, but I think we could do this.

Okay, using a handy online mortgage calculator: this would mean we'd have two loans, a first mortgage for 80% of $375,000, or $300,000; and a second for the remainder after we made our 10% down payment -- or $37,500. Say the first is at 6.25%, and the second is at 8.5%. The montly payments on the first would be $1,847.15; payments on the second would be $288.34. The total would be $2,135.49. Completely doable. Of course there's that pesky matter of a balloon payment. Good way to make sure I don't get too rested at night.

Now for further edification, what if we did a 5% down payment? It would raise our monthly payment by $144.17, for a total of $2,279.66. Also completely doable. Of course, over the life of the loan this would mean we'd pay an additional $33,151.20 in interest. I'd rather put that $144 in some mutual fund or something. But whatever. Who do I think I am, fucking Merril Lynch?

Anyway, that's where all this puts us. It's very much not a given that we'll get this place for $375K, and I also feel like getting those loan terms isn't a definite either, even though some lenders did offer us that. It seems like nothing is concrete until you sign the shit. But if all that were to work out, we'd be okay. Except for that pesky motherfucking balloon payment. Yee.

I guess there's something else I should consider. We could conceivably come up with a full 20%. That would be the absolute shiznit. The shitty shit. Our interest rate would probably go down; we wouldn't have any difficulty getting the loan; and our monthly payment would be low. And we'd own 20% of our house from the start. Then we could put the monthly savings into our bank account and make up for the lost dough pretty quick. Oh. Actually, not that quick. It would take about eleven years. But still... dude, that would be SO SWEET!!!!!!!!!! Oh wait. We wouldn't have the cash for closing costs. Duh. Damn.

Ach. This isn't a real blog post. I'm not going to read this in the future and think back fondly. It's just me thinking out loud. But still, it's helpful.

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