I never thought I was one of those girls who felt obligated to hit a bunch of arbitrary milestones before I turned 30. But, as the big birthday loomed closer and closer I unfortunately started to crack. Everyone around me was getting married, having babies, or getting promoted. I was suddenly feeling behind, and my solution was to buy a house and finally feel like a “grown up”.
It wasn’t really reckless of me, per se. I was fortunate to have a well-paying permanent job, was in a stable long-term relationship, and thought I was being reasonable. That being said, I still rushed it, and didn’t understand exactly what I was getting into. So, if you’re contemplating a first-time home purchase, I would give this at least a cursory read.
1) I wish I had understood interest. I’m not saying that I didn’t research it. I knew the basics, and what the competitive rates were, but ultimately just assumed that interest was un-avoidable. Interest rates were actually pretty low at the time (under 3 per cent). This seemed like nothing, since I was used to credit card rates that were much more exorbitant than that. The bi-weekly payments seemed totally do-able, so I signed up and pretty much though nothing of it for a couple of years.
Later, after coming into some extra money un-expectedly, I decided that the responsible thing to do was toss a bit of it onto my mortgage. The next time I logged into my bank account, I was speechless to see that my amortization period had been reduced by years. I swore it must have been a mistake. It wasn’t.
After looking into it a little further, I realized that the interest is actually astronomical, over time. Most people might not realize this. Online calculators will break down your monthly or bi-weekly payments, but they aren’t going to highlight what you’ll have paid, cumulatively, all said and done. If they did it would probably scare most people away. The real truth about a mortgage? Even with a smaller purchase, like $200, 000, with 10 per cent down, could cost over $100, 000 in interest over a 25 year amortization period. It’s horrifying. The good news is that even making small increases in your payments creates equally astronomical reductions, over time 🙂 I would encourage you to play around with the numbers using a website like this.
2) I wish I understood the true level of responsibility I was shouldering. I knew that I would be liable for a lot more than I would be when renting. But there were tons of things I didn’t think about. When I look at the tree outside my front window, for example, I am no longer simply enjoying the foliage. I wonder if its roots are deviously growing into the sewer system, under the ground, about to wreak havoc (which would totally be your problem to take care of, by the way). I no longer find listening to the sound of rain to be peaceful and relaxing. It makes me check my basement with a newly-found neuroticism, obsessively looking for leaks or cracks in my foundation. Another time we made what I thought was a simple repair to our house, only to find out that we had innocently violated building code, which could have been a legal nightmare.
Friends had cautioned me that there would be times where I would be expected to magically find thousands of dollars for an un-expected disaster. One rather well-off friend of mine was hesitant to purchase a house even though she had over 30 thousand dollars in savings, that wasn’t being used for her down payment. I only took what these people said semi-seriously, and wondered if they were just unlucky, or over-exaggerating. Soon enough, we had our own experience. It was a leak in our roof (pretty classic) and it was a hell-ish two months sorting out the damage and dealing with compounding problems. It kills me to admit this but that issue was actually cited in our home inspection report, that I had only bothered to skim over (it was over 400 pages, and the inspector had, overall, told us we were good to go on the house). You can try and prepare, you can be responsible and save, but it’s the most random things you’d have no way of predicting that will somehow turn around and bite you. I miss the days when I could call my landlord and have little involvement in actually solving the problem.
3) I wish I knew how much work it was going to be. Mostly physical. It’s insane. I bought a small house, am not a neat freak, and thought that I didn’t really care much about aesthetics. I told myself that it would be a cinch because I wouldn’t fuss over the weeds in my lawn, put much effort into decorating, or stress about keeping the place immaculate. But even keeping it at a modest, “presentable” level is hours of work, every week (assuming you don’t want to live in a pig sty). It’s a highly unsatisfying way to spend a Saturday morning. Slowly, I started to cave. Partway through the first summer the weeds were knee-deep, my patio was crumbling, and tiny slivers of sunshine struggled to forced their way though the streaks of grime that seemed to appear on my windows overnight. I started to feel a little self-conscious, like I was living in a creepy haunted house. I felt truly sorry for anyone who had to deliver mail, pizza, or anything to our door. Basically, I realized that I had to start caring at least a liiiiitle bit about this kind of stuff. And if you want to actually be proud of the house you live in, you can expect to spend several hours a week making it look nice. I sometimes (often) miss the days when I lived in an apartment and could quickly run a vacuum through the place and call it a day.
All said and done, I’m not saying that I entirely regret it. For all of the cons I ranted about above, there are of course an equivalent number of benefits – building equity, gaining independence, among some of them. I’m just asking you to make sure you put in a bit more research than I did – and hopefully you’ll end up with fewer surprises.