We bought a house 🏠 Lakeside SlowFI

So I’m still walking almost every day, with hundreds of miles walked since quarantine began. But as quarantine progressed and I had less and less things to keep me entertained, I turned to Redfin browsing. I know. Deadly.

Andddd…. A month ago, I found a listing that I liked at 9PM, did a virtual walk through the next morning, put in an offer the day after, and was under contract the next day. Yup. Four days after I randomly came across a listing, we were under contract to get into A LOT of debt.

The listing agent had the house up for only 5 days, and we were COMPLETE beginners when it came to house buying (we had absolutely NO idea what we were doing), so it’s a miracle that we even got a shot at the house. But we managed to beat out 15 other offers and go under contract!

The following month was filled with a lot of dramas (we ended up getting an appraisal, then a re-appraisal, then a re-re-appraisal… because the seller wasn’t happy with the appraisal… don’t ask), and at the VERY LAST MOMENT (the afternoon before a 9AM closing), the bank called us telling us that we might not get our loan because they can’t verify my husband’s employment.

I feel like I aged a decade with stress and anxiety over the past month… But yesterday, we officially closed!

I’m in debt for the first time in my life, and it’s scary. But we’re hoping to get this mortgage paid off in 7~10 years by pre-paying every month. We’ll have to scale back on our food expenditures, but we’re also moving to an area with not that much good restaurant food, so we’ll have to learn to cook more. I’m also excited to utilize the balcony and the porch to grow vegetables!

Basically, I never thought this would be possible, but I’m going to start pursuing Lakeside SlowFI.

Yes- the house is on a lake!!!

It’s about 40 years old, but the seller had bought the property 9 months ago, completely renovated the whole house, and flipped it (to us). So the inside looks completely new, and all the appliances are new.

It is 2,700sqft with 4 bedrooms, 3.5 bathrooms, and a loft on the top floor that has the amazing view on the photo above. The master bedroom also has this view with huge windows as well.

It’s pretty much not an exaggeration to say that we bought the house for the view… Though the completely renovated interior is very nice too.

We’re moving next weekend, so we have A LOT to do… Including trying to figure out how to organize the walk-in-closet so I can hang my dresses, and fixing some little things up here and there, as well as doing a deep clean of the house given lots of people were coming in and out for the past month touching everything (Gross!).

We instantly fell in love with this place, and hope to make it our forever home. And we’re looking forward to slowly growing into it!

Financials

Of course, this is a Personal Finance blog, so we gotta talk about the financials!

Final Price: $420,000

Down Payment: $120,000

Loan: $300,000 (15 years, interest rate: 2.75%, no pre-payment penalty)

Closing Costs: $12,500

Cash to Close: $121,000 (we had wired $10,000 as Earnest Money Deposit when we went under contract)

Monthly Payment: $2,036/mo (Principal + Interest)

Estimated Escrow (Taxes, Insurance): $660/mo

HOAs (we have 2 HOAs): $60/mo + ????/mo (we’re waiting to hear back on how much the 2nd HOA is)

Estimated Monthly Total: $2,760 (again, we think it’s going to be a little higher than this because it’s missing an HOA)

Pre-Payment Goal: $1,000~1,500/mo (through husband’s paychecks, my freelance work, or both)

According to the Loan Payoff Calculator, here’s how the numbers come out depending on how much we pre-pay to the principal every month:

Original+$1,000+$1,500
Monthly$2,036$3,036$3,538
Total$366,455$340,553$333,983
Interest$66,455$40,553$33,983
Term15yrs9yrs 5 mos7 yrs 11mos

These numbers are a hugeeeeee stretch for a mostly one-income household (as you might recall, I quit my corporate job 1 year ago to pursue freelance), but my husband recently started a new job, so we’re hoping that with being more mindful of our finances and me hustling my butt a bit, we’ll be able to do those pre-payments!

After all, what’s a “goal” if it’s super easy to achieve, right?

We haven’t started being on this kind of financial rhythm yet, so maybe I’ll come back in a few months and say “Nope. We have no idea what we are doing!” and say we’ll scale down on the over-payment.

Currently, our rent is $1,500/mo with all utilities included (except wi-fi), so it’s going to be a HUGE change.

I’m just super thankful that we’ve been on this Financial Independence journey so that when we DID find a dream home, we could just spit out a wad of cash with no issues. We never really had a “goal” to work towards when we were saving money (so to be 100% honest, we haven’t been doing a great job over the past year), but now we’re united in an effort to get rid of this debt!

So! Here starts our decade-long Debt-Free Journey!

-$300,000

We’re here to kick your butt! 😊🔥

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