AS's student loan payment hit, with $138 going to principal. That takes May debt repayment to $928, exceeding the $900 goal.
Our debt right now is at $239, 248. It's weird to think that this may be its lowest point for, well, quite a few years. Here's a snapshot, for posterity:
HOME DEBT
US Mortgage $152,912
UK Mortgage 1: GBP33334--pays off GBP134/mo $52,677
UK Mortgage 2: GBP7027--pays off GBP28/mo $11,104
UK Mortgage 3: GBP7399--pays off GBP30/mo $11,693
Total home debt $228,386
EDUCATION DEBT
AS loan $7,656
NT loan $3,206
Total student loan debt $10,862
TOTAL HOUSEHOLD DEBT $239,248
So, a lot's been going on, but I still don't know for sure whether I'm buying the house. Here's the update:
- Deposited the $5K loaned by our friends into savings. Now our savings accounts have just over $47K, enough for a 10% down payment on the $469,900 home (as long as we can get seller to pay closing costs).
- Found out that UK renos don't have to happen until NEXT July, and the current renter has renewed his lease until next May. This is GREAT news because it means we can indeed use the UK reno money for a down payment and build up the funds over the next year. Also our rental income is going up a bit, so that will help with saving up.
- Went back and forth with our realtor over whether the home we want is overpriced. I think we're all in agreement that because of the rent you could get by letting both units, the price makes sense. So we probably won't haggle other than trying to get seller to pay closing costs.
- Filled out a form for the mortgage broker and spoke to him. He said that we would easily qualify for that size loan BUT, because it's a duplex, the required down payment is 20%! Broker says he might be able to do some kind of second loan for the other 10% of the down payment. I should find out tomorrow.
- Made an appointment with our realtor to see the home again on Thursday evening.
- Found out the current renters are leaving. They could try to get us new ones, but I don't want the home tied up for 6 months to a year and then try to kick someone out. We'll probably ask them not to replace the renters, even though it will make the first couple months of mortgage payments tight.
So it looks like the new debt for buying this place would be:
$423K between the two mortgages
$5K to our friends
$15K or so on a 0% card for US renovations
$443K of new debt! But, hopefully we'd sell our current condo in a few months and clear out that $152K of debt, and if we got the WV deal ($50K), we could use it to clear up some of the debt (as well as help fund the UK renovation before it comes up).
But I figured out that if the worst-case scenario happened and neither of these things happened, we could probably still pay off our friends by the end of this year, and the US and UK renovations by October of next year. But I don't think our condo will sit on the market that long. We're willing to price it for the cost of the mortgage to make it move, and we now think our mortgage is less than the current value, so it should be fine. Once it goes away, that clears up $1750 per month that will speed up the paying off of our friends and renovations.
It feels scary, but it also feels like if we could do this now, we could make up the ground and be pretty much where we want to be for the foreseeable future.
I don't think I've really detailed what we're looking at! It's a duplex in the neighborhood we want, close to bus lines and car share cars. The first floor would be for our friends and is 2BR, 1 bath. The second and third floors would be ours and have 5 BRs, 3 baths (small bathrooms but a really big master bedroom). There's a mostly finished basement we would all share with laundry, a big all-purpose room, a kitchen area (!?), a bathroom and tons of storage closets and extra weird little rooms.
Our friends would have a big front porch and a smaller back deck. We would have a big 2nd story front porch and TWO smaller back decks. There's a decent back area that consists of a patio made of paver stones and a 2-car garage; we don't really have use for any of that but figure the space could be made over into a yard instead.
I still need to confirm utility costs tomorrow, but I reckon our costs wouldn't be much over $2000 per month. The mortgage will likely be about $2800, and our friends will pay us $1100. Our current place is $1750 including mortgage and association dues, so not a huge step up in cost, as long as we can ditch our current mortgage pretty soon.
I'll know more tomorrow and will update when I can!
Reached May debt goal! And update on the home situation
May 28th, 2014 at 06:07 am
May 28th, 2014 at 12:07 pm 1401278878
May 28th, 2014 at 12:09 pm 1401278946
May 28th, 2014 at 12:32 pm 1401280360
Rachael, sorry! We live in the US in a condo. My husband is from the UK and still has a flat over there; he's got a main mortgage and two home-equity loans on it. We keep it because it generates a small amount of rental income. We were actually hoping to move to the UK soon, but it just doesn't look feasible so now our sights are set on a home in the US. We would want to sell the US condo but keep the UK flat for rental.
May 28th, 2014 at 02:23 pm 1401287000
I would also shop the loan with other lenders/brokers. You are not buying an income property. You are buying an owner-occupied property with a second unit.
It does not sound like there is much of a yard for the kids. Is that important to you?
With the amount of debt you are willing to take on and not having sold the condo or gotten the WV money, consider the possibility that you have a bad case of house fever. In your shoes, I would step back and think about what you would do if the condo did not sell or one of you lost a job. You may be stretching too far.
May 28th, 2014 at 02:34 pm 1401287677
May 29th, 2014 at 01:07 am 1401325626