Comments on: The Path to Home Ownership

By: Weekly Reading 11/21 | Money Under 30

Weekly Reading 11/21 | Money Under 30 — Sat, 21 Nov 2009 17:04:55 +0000

[...] great personal story about the road to home ownership. (Fiscal [...]

By: Wojciech Kulicki

Wojciech Kulicki — Sat, 21 Nov 2009 04:54:13 +0000

I completely agree, Len. It’s much easier to live “ahead of the curve” that to try to catch up to it all the time. Patience is difficult, but important.

By: Black Coffee: My Favorite Blogs, Money News & Opinions #22

Black Coffee: My Favorite Blogs, Money News & Opinions #22 — Sat, 21 Nov 2009 00:50:33 +0000

[...] Fizzle – Meanwhile, the pecuniary pepper lays out the proper, responsible, path to home ownership. Hint: If you do it right, you’re going to need to pony up a significant portion of cash [...]

By: Len Penzo

Len Penzo — Sat, 21 Nov 2009 00:21:26 +0000

Excellent post, Wojo.

One suggestion: Whenever possible, before closing on your house, I would recommend setting aside 3 to 6 months worth of mortgage payments in a special account to handle periods of job loss or extended illness. It’s a whole lot easier to save the money and establish this emergency fund *before* you buy your house.

Best,

Len
Len Penzo dot Com

By: Wojciech Kulicki

Wojciech Kulicki — Fri, 20 Nov 2009 19:49:26 +0000

We looked at several banks (3-4) as well as a mortgage broker. We had good and bad experiences with banks, and a generally good experience with the mortgage broker. In the end, the loan was being processed through a bank.

I really don’t have an opinion either way on brokers, and I think they can be a great way to find a wide range of financing options and walk you through the process. However, I am concerned about who pays their bills at the end of the day and whose interests they are protecting. If we went that route, I would be sure to do my research and pick the product I think is right for me (with their help, of course).

By: Evolution Of Wealth

Evolution Of Wealth — Fri, 20 Nov 2009 18:58:51 +0000

A great post. Thank you for walking through your past experiences so we all could learn from it. You mention banks throughout the post. What is your take on mortgage brokers? Did you only go to a bank? If so, why?

By: Wojciech Kulicki

Wojciech Kulicki — Fri, 20 Nov 2009 16:55:11 +0000

I’m glad to hear things worked out and you’re back on your feet. It’s a good thing you had some money stashed away, too!

The closing costs were unexpected for us too, and it definitely affects your readiness to buy. Sometimes, we’re so eager to jump the gun that as soon as we have a down payment, we go for the kill.

People forget that houses need to be painted, A/C’s replaced, roof leaks repaired, etc…

By: Wojciech Kulicki

Wojciech Kulicki — Fri, 20 Nov 2009 16:52:43 +0000

Thanks Paul! Part of the reason I like the two-step approach (land & build) is because it would let us put a lot of equity into the land before even having to start construction (potentially even paying it off completely).

By: Paul @ FiscalGeek

Paul @ FiscalGeek — Fri, 20 Nov 2009 16:44:05 +0000

And as a two time home buyer, both at 0% down do everything in your power to have 20% down before you even think about buying that house. Don’t be lured into the “If I don’t now, I never will” house fever. If I had been smarter in my earlier years I’d be in a much different place then I am now with no equity on a house with two mortgages.

By: Jason

Jason — Fri, 20 Nov 2009 16:22:03 +0000

Great post, Wojciech! We took the homeownership plunge this year, and the timing was both great and bad.

My daughter was born in February and we were starting to outgrow our 2 bedroom apt (I work at home in the 2nd bedroom), so we were casually looking. A townhouse that had been under contract came back on the market more than 10% cheaper than its last listing price, and its price fit into our budget. Of course, I wasn’t completely aware of the high closing costs — another 3 or 4 percent — but we made an offer and it was accepted.

A few weeks later, I got laid off. It wasn’t fun. A new baby, a one income household, and now a mortgage. But we had emergency funds built up, and were able to take advantage of the extra $8,000 first time homebuyer credit. I would have rather used it to finish paying off my school loans, but when you need it, you need it.

Now I’m recently re-employed and waiting to pocket as much money as I can to prepare for any other emergency — and household related problems. They happen, and we’ve yet to have a big one … so I know it’s somewhere down the line.