Home-buying can be emotionally draining and stressful process. More than the process of searching for a home, making an offer, waiting for the seller to accept or counter your offer and then applying for a mortgage, I’m finding the financial to be the most stressful of all. For years, I have diligently saved and deprived myself certain luxuries in the hopes that I would someday become a homeowner. But now here I am writing the check for down payment, handing over what took me the greater part of two and a half years to accumulate. And then after that, there is the closing cost which is another huge chunk of change. As we get closer to the closing day, I find myself in a mini-panic. The money that I’m using to pay for my down payment and closing cost could actually afford me a three-bedroom, one bath with a finished basement and back yard in Pennsylvania. I could have bought a home in Pennsylvania for cash! It’s a little vexing that as a first-time home buyer in Brooklyn, NY, my home purchase is 10x more than what my cousin paid for her starter home in Pennsylvania (that’s not an exaggeration).
Last week I purchase hazard (homeowners) insurance for the property. To my surprise, it was less than $1,000 for one year’s coverage. My interest rate is locked in at 4.65 %. I put down 5% on the property. The closing cost are about 4 % of the purchase price. Naively, I had assumed that the closing cost would be about $4,000 less than what it is. I really could use that money to pay for furniture or even the replacement fridge (fridge missing handles) or stove (2 burners do not light up). I will have to hire someone to clean the clogged cutters. Then there is the plumbing, the missing tiles in the bathroom and the leaking under the kitchen sink. The formica cabinets are also in need of some heavy-duty cleaning and painting and the fixing the missing railing on the front stoop. I have been a meticulous saver over the years, though these small fixes do add up. That $4,000 would have come in handy.
My mortgage including taxes, private mortgage insurance, etc will be about 2/3 of my monthly income. I still owe about $9,000 in student loan debt. Fortunately, I paid off my car last year. The financial responsibility is really hitting me.