Tuesday, July 5, 2011

Money, Money, Money

We've yet to break ground, but we're getting a lot of requests for checks these days. In a perfect world, we would have had cash to build our dream house. In our reality, we were blessed to have the down payment and great lender who gave us a nice rate on a "story" loan--where they listen to our story instead of just looking at our credit score.

As we thought about how much we were willing to spend on a new house, my comfort level is a little more conservative than Niels', so my budget wins. Basically, I wanted to make sure that we could pay for everything on Niels' salary, and not depend at all on my SSA--except to pay down the mortgage early. That said, I wanted to know that if something happened to Niels' job, we could reasonably expect to swing the mortgage for awhile. Somewhere in there is our magic number.

We knew when we were approved for our loan how much "give" we had between Charis' estimate and what we could still get approved for after potential upgrades and overages. Our hope is that we can make double payments on the construction loan while the house is being built, and pay as much as we can out-of-pocket as we go along.

This turned out to be a great lesson in marriage communication because Niels was thinking that we would pay those charges as they came up (permits, fees, upgrades, etc.). I was thinking we would keep tabs on those amounts, and pay that much extra to the loan each month, giving us the flexibility to pay things off without amortization, but also the freedom to let things go to the loan if needed. Now that we've worked out that little "failure to communicate," we've been writing out a lot of checks this week:

$2,500 - Association application. We are moving into a development, so they get to approve the elevation of our house. This check is held until we finish the house as proposed, and have our lawn and landscaping done. Fortunately, we should get this money back.

$200 - Building permit.

$25 - Zoning fee/Dumpster permit

$538 - Real estate taxes on the lot (ouch!)

$ 120 - Changes to our plan. (One last round and we should be done!)

It's very painful to see our savings drop at such a fast rate. I keep reminding myself that this is what we've been saving for, and thanking God that we have the money to have this opportunity. Print this post

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