It’s official! I’m a homeowner! Words cannot express how stoked and excited I am. I have been house hunting since late March, and, after countless hours spent on Zillow and over three trillion billion gazillion property visits, I have finally hit the jackpot. Huzzah!
I first started thinking about home ownership back in January. It had been a year since I had moved from New York to Boise to work for Bodybuilding.com, and at that point I knew that this was where I wanted to be, long-term. I absolutely love the company, I thoroughly enjoy my job, I have fantastic coworkers, and I have an awesome manager who allows me to work very flexible hours. I can easily see myself staying with Bodybuilding.com until the day I retire (early of course 😉 ).
Boise is a place where, generally speaking, housing is currently cheaper than renting. As such, I felt like it made more sense for me to purchase a house and build some equity rather than continue effectively losing 100% of my money every month. Furthermore, Boise is a booming city, having seen its population nearly double over the last 20 years and showing no signs of slowing down. The population is estimated to reach 1 million by 2040, which means that the area will always be ripe with opportunities for resale should the need arise down the road. The housing market is already cutthroat as is; I must have visited over a dozen houses between March and May, and there were so many I liked that were gone literally the morning after they were listed. There certainly isn’t a shortage of demand for housing in Boise, that’s for sure.
So let’s get into the specifics of my house. I purchased it for $170k, with a measly 0.5% down payment that came out to $850. I took out two loans to make this happen: one loan of $165k with an interest rate of 3.5%, and one loan of $5000 with an interest rate of 4.5%. As such, I have two mortgages, the first of which amounts to roughly $1000/month, and the second of which amounts to about $30/month. Seeing as I was paying $955/month in rent for my 3-bedroom apartment (which was about 100 square feet smaller than the house), it’s easy to see that housing is cheaper than renting.
Of course, by putting down such a tiny down payment, I’m obviously going to be paying a lot of money in interest and private mortgage insurance, which is required for down payments of less than 20%. Still, I think that the purchase was more than worth it. My goal is to knock out the smaller, higher-interest mortgage as quickly as possible in order to eliminate the second monthly payment. Furthermore, as I earn more money over time, both from my job and from my investments, I will most likely start paying off bigger chunks of my remaining mortgage in order to erase the loan faster and thus reduce the amount of interest I will pay. And since these are 30-year fixed mortgages, at least I won’t ever have any surprises regarding my payments, unlike my rent which most likely would have gone up over time if interest rates are to rise.
Here are a few photos of my new abode for your viewing pleasure. It is a 3-bedroom, single-level, 1312 square-foot house that was built in 1992.
And here is a picture of me pulling heavy ferrum against the force of innumerable gravitons, because, hey, I’m all about dat gym life.
Now, I know that some of you might be thinking that, for someone who espouses frugality and plans on investing aggressively in order to retire early, such a big house for a single guy is overkill. But housing is something that I am not willing to compromise on. I grew up in a relatively small apartment and shared a bedroom with my brother my whole life, and I always felt cramped and longed to have my own space. Generally speaking, I am an individual who needs a certain amount of space in order to feel mentally and emotionally at peace. That might sound weird, but it is what it is. I fell in love with this house from the moment I set foot in it, and since home ownership is something I have dreamed of ever since I can remember, I have no regrets with my purchase.
The only downside is that I won’t be investing as much over the next couple of months, as I will now focus on building a legit emergency fund and paying off some lingering credit card debt (which will unfortunately increase substantially due to necessary appliance purchases for the house). Thankfully, all my credit debt still has over 12 months remaining at 0% APR, and I will most likely make use of some credit surfing strategies down the road if I need to stretch my payments for longer periods at 0% APR. However, seeing as how a lot of oil companies and REITs are selling for crazy cheap these days, I wouldn’t be surprised if my resolve to save up in the near future gets flushed down the drain and “building my emergency fund” becomes “loading up on CVX and OHI”, or something of the like. Lol.
What are your thoughts on home ownership? Do you prefer renting or owning? And what do you think of my new casa? Whether you think it looks awesome or you feel like you’ve seen fishbowls that look better, let me know in the comments!