Our House, a bit of a Gamble on the Future

Our new house...

Our new house…

We bought our house one year ago, and assuming no near future shock, it was both the bottom of the price trough and near the bottom of interest rates.  With these converging events, a strong local employment picture, and our fondness of the area (not particularly far from where either of us grew up) we ended up buying significantly more house than we needed, and would probably need* for 4-5 years (*although no one would ever “need” the house we bought).

It was not a starter home.  But do starter homes make that much sense?  Homes are ridiculously expensive and a poor investment (http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/), and need to be held something like 10 years to make even a bit of financial sense.  To us that meant look for a home that would make sense in 5-10 years based on our current life expectations.  We expect to have 2 kids (or 3 😉 )  We expect the local employment picture to stay safe-ish with many strong local companies in the Seattle area.  We expect our families to stay nearby, with all parents and siblings living, working, or going to school within an hour or so of us.

We know a lot can change in 5-10 years, and if something significant were to happen we may go the rental route, or sell, who knows.  With all the ground one loses to interest and upkeep, we just decided we did not want to get on the house ladder and find ourselves 5 years into a “starter” home just to start over in a more expensive house.

Instead we bought an “affordable” home at about 3 times our annual income, with 20% down at 3.875% interest.  We have also been slowly chipping extra away at the principal (just a little extra for the psychological boost, we know we “shouldn’t” financially).  The house is neither a fixer upper, nor extravagantly finished.  The carpets appear to be original (20 years), needed a paint job badly, and has mostly older appliances, trim, doors etc.  It was just move-in-ready, and very livable with moderate maintenance required, and that is just perfect for us.

So should I be blogging years from now, I’ll let you know what we think of our decision to try and predict the future and sacrifice a bit of mobility.

Has anyone gone the same route?  Did your experience change how you would do it again?


One thought on “Our House, a bit of a Gamble on the Future

  1. jlcollinsnh

    Congratulations on your (relatively) new home. Sounds to me like you bought it with your eyes wide open and within very sensible parameters.

    Especially if that’s it in the picture. 😉

    Thanks for the link to my ‘terrible investment’ post. If you haven’t already, you might also check out Roots v. Wings.

    Oh, and congrats on the blog!


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