My entire purpose of this blog is to track my progress out of debt, especially in consideration with the income that I had starting out. True, my income has increased since I started my climb, but the debt is still there – only one of the four major debts that I have is over 50% paid off.
And then there’s the house. It is an absolutely wonderful looking house. One that would serve our needs possibly for the rest of our lives. We would be able to pick the colors, the layout, everything. It is a shiny new object that flashed its smile so beautifully that it captured the heart and ideas of my wife, and gave me a fever. Unfortunately, the cure was not simply more cowbell.
My readership, though small in number, can be quite eye-opening. First, Jim posted his thoughts on the news. And I was taken back. I really hadn’t opened my eyes to see what I was actually saying. Then I turned to another reader and directly asked for their opinion – what they would do in my shoes. Of course, I realize that perspectives are different, and that I might not take the same course of action that someone else might, but there is strength in numbers. There is a certain validity to multiple people holding the same opinion. Not that it is necessarily right, but it certainly carries more weight.
Then there is the hesitance of the man who would make money from the transaction, the lender. If he is hesitant to grant the loan, and he has a vested interest in selling the loan, then I should allow that to weigh in. His reluctance seems to be in stark contrast with his own goals.
I even went to two other lenders, one with a specific mortgage company, and one who basically shops mortgage companies, and both informed me that the deal was doable, but not, perhaps the wisest move I could make.
As long as nothing goes wrong, and nothing big happens for a while, we would be fine with the loan. Or if our emergency fund was sitting around $10k higher than it is, we would be fine.
So I signed the note that canceled the deal. We may or may not be out our $500 earnest money check, and we may or may not be able to go back in January and work a deal. Most of it will depend on how much progress we can make.
The important thing is, the advice of my readership to take another look at what I was doing helped me out of an emotional decision. Sometimes these mistakes are costly, but better $500 now than a foreclosed home later.
So, Jim, David & Miss Kate, thank you. Thank you for your thoughts and your willingness to speak up.
Dear Goliath Debt, have you discovered Millionaire Mommy Next Door yet? She doesn't think home ownership is the way to go. Here's one of her posts on it: http://preview.tinyurl.com/5slsdv
ReplyDeleteHer views make a lot of sense but are totally against the "American Dream" of home ownership. I hate renting though...
I personally would not choose to buy a brand new home for a few reasons. First, poor construction. They make them with chicken wire and styrofoam in our area, and people pay hundreds of thousands for that! Secondly, all the fumes and chemical smells that come with new construction, paint, carpeting, etc. that can detrimental to our health.
I'm glad you paid $500 to avoid a situation that could have been much worse. I would just keep attacking your debt and get a feel for where you're at next year. The lenders and mortgage brokers don't want to touch anything with risk right now. If you decided to build a few years ago, they would give you whatever you wanted. Pay off debt and build EF, it's a better plan for getting where you want to be. Remember, renting is not a long term solution.
ReplyDeleteRegarding the previous post, there's a reason they are using other types of material. Depending on where you are at, the lightweight and foam materials make better insulation material which lowers the heating costs. New construction always has risks, but the major benefit is you know exactly what goes into the house. If you're buying an older house, you get to deal with its history and more than likely put even more money into it. Carpet, paint, etc are things that wear down and have to be replaced.