Wednesday, January 4, 2012

The beginning of paperwork signing

It finally feels official. I am leaving work early today to head over to my bank to get a Cashier’s Check for the ernest money for the house. I also signed the preliminary paperwork accepting the terms of the agreement.

Yup, I am officially on my way to a 30 year mortgage. It isn’t 40 acres and a mule, but 5,000 square feet of dirt and 1800 square feet of house.
I went for the 30 year mortgage so I have that buffer of a lower required minimum monthly payment, with the opportunity to pay off more every month. If I apply the same amount to the mortgage as I currently pay for rent (minus the extra utilities) I knock the mortgage term length down to 15 years.

If I can rent out the basement it will knock the mortgage term length down to just about 10 years.

If I rent out the basement and the second bedroom on the main floor, I knock the mortgage term length down to right at 6 years.

Six years to be able to own the home mortgage free. Six years of renters tearing up the house. Six years of no personal space.

So why don’t I just get a 15 year loan or a 10 year loan? Well, the interest rate creeps up ever so slightly the shorter the term, and I would also be locked into very high minimum monthly payments that would require me to always have renters.  I can see myself going in spurts renting out the spaces, with longish periods of time where the house contains only myself and no renters.

Long story short, it would be most realistic for me to plan on  10-12 years of mortgage payments.

I am excited!

1 comment: