Author Archives: Mom

About Mom

A family of three living in the Pittsburgh area. We both work full-time and work on raising our daughter.

Closer to Closing

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We spent the weekend selecting the floors, carpet, cabinets, countertops, etc that we’ll be putting in our new home. We also got the final contingency expired or removed for selling our house in VA. We’re actually going to sign all of the seller paperwork tomorrow at the bank. We’ll be getting about 82k estimated by the HUD-1, plus about $2500 back from escrow, and $2500 from USAA’s MoversAdvantage. Well more than the 20% we need for our new place.

We’ll be putting down only 20% on the new place, and saving the rest to buy the appliances that the house doesn’t come with (fridge, washer/dryer, freezer, blinds) and networking. We’ll also be saving about 2k per month towards “extras” while we have no mortgage. Our new mortgage plus “escrow” will be about $2100, more than we originally thought, but we’re also getting a lot more than we originally thought, and it’s still less than we are paying on our house in VA, so it’s an improvement. We’re probably not going to escrow – it may depend on any fee/interest rate hit we take by not escrowing – but we’re leaning towards not escrowing. We have the discipline to save it ourselves, and almost 9k/year gaining interest, even at less than 1%, is still pretty good.

The movers are coming this Saturday to take everything out of the house and put it in storage, then we’ll be “homeless”. Closing officially happens on October 1, and we’re 95% of the way there. I’m not going to say 100% until the money is sitting in our account though! Interest on ~85k for at least 5 months will be kinda nice.

Donating, Trashing, Selling, Moving

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Total items out of the house: ???/365

I really have no idea how many things are no longer in the house, because this past weekend, we almost finished packing up the house for the movers to come on the 27th. I took 2 RAV4’s (with the middle seats folded down) worth of trash and recycling to the dump. We also had a junk removal company come and take the piano, a couch and a daybed. We thought about listing them for free on craigslist, but I was concerned about timing (we were only in town for 1.5 days) and potential damage to the house with amateurs trying to move the piano. Since the piano was going, we had them take two other large furniture items we knew weren’t going to fit in the new house as well. $450 well spent I think.

I tried to sell three more items via a Facebook yard sale, but no bites. I think we won’t be using them in the new place, but they’re either worth much more if I had time to let them sit on craigslist, or they might fit in the new place, so we’ll just pay to move them with us and address the issue later.

I have a few (3) boxes marked donation – I don’t have time to get them to the donation center, so they’re in clearly marked boxes and will go straight to the donation center in Pittsburgh once stuff is out of storage. We’re paying by weight, so I’m not too concerned about the cost to move/store them.

When you put all of your stuff in the garage in boxes, you really get an idea of just how much stuff you have. We have a two-car garage – pretty normal in size. It is completely full of boxes about 4-5ft high with a little path all along the edge, and we have more boxes scattered throughout the house. On the plus side, we have almost everything packed up – there are a few last minute things (like sheets on the beds) to pack, but we’ll be able to do that the night before or the morning the movers come. We’ve gotten to the point where we wonder how exactly to pack certain things – like snow shovels…

We’re almost to closing, and it’s looking like we’ll make it to closing on October 1 without any issues. I’ve already put on my calendar when to call the electric company and water company to come out and get final readings. Looking forward to being mortgage free for a few months!

To Escrow or Not Escrow

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With our new house, since we’re planning on putting down 20%, we were given the choice to escrow our taxes and insurance or not.  I didn’t realize this was even an option – we’ve *always* escrowed.  Of course, this is the first time we’re putting a full 20% down on a house.  There are advantages and disadvantages to each option, but I think we’re leaning towards not escrowing because we know we have the discipline and would like the interest.

To Escrow

Escrowing is “easy” – we don’t have to worry about paying our property taxes each year – the mortgage company takes care of it.  If we were bad at budgeting, escrow would be a good thing.  However, we’re pretty good at budgeting for long term expenses (we do it for our vehicle property taxes as well as car and life insurance).  If we don’t escrow, we’ll have to save up for the first payment – which is in April for my mom (same county, different school district).  Now, our home should be assessed as unimproved land for that first April payment, but then we’ll need to pay the full amount once they figure that out.   That’s potentially having to save 8k in one month for taxes.

To Not Escrow

One of my pet peeves about escrow is the analysis that they do each year and it alternates between sending us a check for a few hundred dollars and us owing a few hundred dollars per year.  I wish they’d just assume that the taxes will be higher (because they probably will be!), and charge the difference – instead they send us a check, and are “surprised” when we owe money the following year.

If we save our money ourselves, we’re looking at earning interest on about 9k/year – not much right now, but possibly more in the future.  And we want to pay the mortgage off in about 10 years, so we’d be paying the taxes and insurance ourselves anyway at that point – might as well get used to paying it ourselves now.

Have you had the choice to escrow or not?  What did you choose and why?

Detailed Financial Picture – September 2014

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August’s Numbers

As of September 8, 2014, we are $436,450.69 in debt (that includes the mortgage).  Without the mortgage, we’re at $23,500 in debt from our auto loan and line of credit. We currently have $944,029.8 in assets (including our house).  Our retirement accounts are at $403,223.11. Our Net Worth is $507,579.11   (includes house and mortgage), down from $619,406.42 last month (18.05% decrease).

I’ve adjusted our home value to be our sales price minus the estimated selling costs (about $48k), and adjusted our vehicle values as well.  The selling costs are where we’re taking the big hit.  I also pulled money out of our line of credit to put the 8k escrow down on the new house, thereby increasing our indebtedness.  I’m expecting to pay that off when closing on our house happens.  We’re expected to get about 85k out of our house, and we’re only expecting to put down 75-80k on the new place in February/March.  In addition to being able to save an additional $2,000/mth by not paying a mortgage, we’ll be able to cover down payment plus closing costs plus paying off the 8k line of credit.  One thing I have to keep track of is all the expenses we’re expecting *after* we close on the new place.  We’ll have to pay “out of pocket” (ie. not in the mortgage) for any networking we’re doing – est $2,000, a fridge – est $1700, and washer and dryer – est $1500, and any window coverings (and the whole moving thing).  I need to at least pay for some sheers there to keep privacy in the upstairs bedrooms.  So, basically, I’m hoarding money until we get through closing on the new place and moved in, then I’ll see what we have left and pay off anything I reasonably can.

I’m really looking forward to things settling down and starting a new routine and new budget – even if it is the “temporary” routine of living at my mom’s without a mortgage.  If my guesstimates are close, we’ll have the line of credit paid off by the end of the year, and just the car payment left for a while.  Then once we start with a new mortgage, we’ll be able to save quite a bit – and we’re hoping to pay off the loan in about 10 years – if not sooner (we’re still taking a 30yr fixed loan).

The markets were OK to us, we’re about flat this month, with just our contributions.  Next month will hopefully see an increase as my first 403(b) contribution will show up.

Debt (in the order we’re paying it down):

  • Line of credit (8.75%): $8,000.00 (+8,000.00)
  • Chase (4.99% for life): $ 0.00 
  • Student loans (aggregated 4.21%):  $0.00 
  • Car loan (0%): $15,500 (-500.00)
  • Mortgage (4.125%): $412,950.69  (-715.75)

Total paid off in August: – $6,784.25

Under contract to sell!

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Our house in VA is officially under a ratified contract and off the market.  The expected closing date is October 1.  *fingers crossed* that we make it to closing on time!

We’re going in to sign the paperwork to start our new construction on Saturday – putting 8k into escrow, with a ballpark final price of 362k.   That’ll put our estimated mortgage (with taxes and insurance) payment at as low as 1800/mth , and as high as 2100/mth, depending on the interest rates available when we close and how many points we can pay.  One local lender is offering 3.25% right now for 2 points, but if we go with them, we’ll lose out on a 35k builder incentive credit.  We have to go with the builder’s lender to save that – already figured into the 362k amount.  Their rates aren’t bad, but I don’t know what options we have for paying points to reduce our total payment.

I ran a few numbers, and paying points up front will lower our payment more than putting more down.  We’re going to put 20% down, whatever the final cost is, and save the rest for either paying points or paying for appliances that aren’t included (fridge and washer/dryer).  Anything else will go towards paying the movers and replenishing our emergency fund.

August 2014 Early Retirement Progress

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We contributed $3,806.57 this month to our retirement accounts  We gained $10,857.66 in interest this month.  That’s almost as good as we did in February when we gained just over $14,000.  The markets were nice to us this month, and hopefully they continue.

At this moment, I’m more concerned about mortgage interest rates remaining relatively low.  We wouldn’t borrow the money for our new house until February at the earliest, March as likeliest, and April as a late option.  Interest rates do more for our monthly payment than our option choices.  We’re looking at about 1900-$2100/month depending on exact rates for the new construction – but that wouldn’t start until March probably (maybe as late as April).  We’re hoping that our house in VA sells before the end of the year – preferably in the next few months, so we can save that payment until we move in.

I’ve maxed out my 403(b) contribution percentage which will start coming out in my September paycheck – 20% of my salary (~$2100/mth with “match”).  That will increase our monthly contribution for the rest of the year, pushing us just over $45k in contributions for the year.  We’re just going to learn to live on a lower take home pay.  (I’ve also figured out that we’ll end up paying more PA taxes at 4.07% of gross than VA’s 6% of Federal AGI 🙁 )  I have to wait until my September paycheck to figure out our new monthly net amount.

2014 Totals

So far, for 2014, we’ve contributed $26,905.35 (67.26% of the new goal of 40k), and we’ve gained $26,041.09 in investment gains (128.53% of our planned total).

Offer #1

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In the last few days, we’ve had a lot of progress on the selling and buying front.  We’re pretty sure we’ve figured out where we want to live (Jefferson Hills), in new construction. I’m testing the drive into work tomorrow to confirm if the commute is OK.  I got myself a parking pass – it’s in one of the more expensive areas ($121.50/mth) because that’s all that’s left, but it is a garage.  After the bus passed by 3 days in a row without stopping at my stop for me to get on – resulting in me taking 1.5hrs to get home each time – I’m done with the bus for actual commuting.

We also got an offer on our house in VA tonight.  Almost exactly what we were asking for – they offered list price with 10k in closing cost assistance.  We’re countering with list price and 5k in closing cost assistance.  They want to close while we’ll be in Europe, so we told our Realtor that we need to close before we leave (preferable) or after we get back.  So, our closing date may be Sept 30.  Not so far away!  Fingers crossed that we get to closing with this first one!

We’ve never dealt with new construction, but we *really* liked the model house and the available lots.  The model was within our price range, and there were some options that we would do without to make it even more affordable – but we’d finally have our “dream” kitchen!  They want 8k down before we can get on the construction schedule, and then we’d complete the financing when the house was finished.  We’re looking at 5-6 months at least – during which time, we’d be living at my mom’s and saving money (almost 3k/month) to buy the “upgrades” we want that aren’t offered as part of the package – like a specific range or custom paint colors.  We’re trying to do our research about the builder through Angie’s List and BBB, but this is new territory for us.

Has anyone bought new construction?  Anything we should specifically ask or research about the builder or the process?  Or anything else that would be useful for us to know about buying a new construction home?

Decisions, Decisions, Decisions

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We have to pick where we’re going to live in Pittsburgh over the next few months. We’re at least trying to decide what part of the city we want to be looking in so that when our house does sell, we’ll be ready to seriously look for something.

We were originally looking at the North Hills (North Allegheny school district), but after commuting for the last week and a half, I’m wondering if we shouldn’t live closer to my job – in Squirrel Hill (my job is in Oakland). I’ve been driving to a park and ride and then riding the bus in (the 61C), and it’s taking me about an hour each way. I leave before Daughter Person gets up in the morning, and I’m home in time to spend about 2 hours with her before she goes to bed. I’m used to getting up at 7:30, to be at work by 8-8:30 and then picking her up by 4-4:30pm. This long commute stuff may be for the birds. I have been taking the bus primarily because at my mom’s the bus takes the exact same route I would drive, it only takes about 5 minutes longer, and it’s free. Living in the North hills, I’d be driving every day, paying $87/mth for parking, and theoretically driving 30 minutes each way (I’m going to assume my co-workers are being generous and stretch that to 40-45 minutes each way). That kind of commute was fine – when I was single, and when I wasn’t a parent. Now, I want to get home to spend time with Daughter Person in the evenings – not sit on the bus or in the car all day.

We’ve talked about possibly buying in Squirrel Hill – the neighborhood just outside of Oakland where I work. I could walk it (about 20-30 minutes – biking is not an option because I’m very hill averse), or take any of 5 buses home – all of which seem to come more often than the bus I ride now. Tonight, the one bus I need to get home drove right past CMU without stopping because it was full – so I waited *another* 30 minutes for the next bus – something I’d rather not continue to do.

There are some advantages besides the shorter commute: a smaller home is easier to find, we’d be walking distance to a lot of great stuff – a grocery, a jewish community center, lots of restaurants, etc. But there are some serious downsides: the schools are crappy from what I’ve heard (especially compared to North Allegheny), and it’s in the city, with smaller yards and property. We’d pay 3% local tax instead of 1% local tax (comes out to about $4000/year). *But*, we’d likely get rid of one vehicle (and be able to get a 1 car garage instead of 2), and not paying gas or insurance on it – but that doesn’t quite match up to $4000/year difference (maybe $3000/year). We’d still have a car payment because we’d be keeping the car with the payment, but we wouldn’t be saving for a replacement car for a while.

The housing prices are within our price range, and in decent parts of town (except maybe the schools). The commute can’t be beat – and if we ever worked outside the city, we’d be right downtown and could get most places pretty easily.  We know this isn’t likely to be our “forever” house, so there are some compromises we’re willing to make.

Are we missing something major to consider? Does anyone have kids in the Pittsburgh Public Schools (Colfax K-8 and Alderdice High school) that would be willing to talk about them?

Settling In – Part 1

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After one week at my new position, we’re starting to settle into a pattern living at my mom’s.  Although, when they say you can never go back, we’re living that at the moment.  We’re all trying to keep our distance from each other, but the house is small, so we bump into each other a lot.

I’ve been driving to a park and ride and then taking the bus into the city.  The first day, I didn’t get home until 7pm, I left campus at 5:45.  Now, I’m getting there earlier and leaving by 4:30 and getting home by 5:30, even with stopping at the local wine store 🙂   If I was driving, I’d only save about 5-10 minutes, because I’d take the same route the bus would.  But, I’d have to pay for parking whereas the bus is free for me as university staff.

Daughter Person is really liking her new daycare – she actually wants to go to school every morning.  The center is really small, but the teacher enjoys what she’s doing and it shows.  We haven’t had any potty accidents except the first day she was there (yay!), so my biggest fear hasn’t materialized.

Our house in VA had 6 showings this weekend, but we haven’t heard any feedback yet.  *Fingers crossed* that we hear something shortly.

Money is flowing out a little more quickly than it’s flowing in due to all the moving and the registration fees and license fees, and not being able to rely on our systems for saving money (like our large freezer).  We’re limping along as best we can, and hopefully we’ll get some new systems in place to help us save money.

How have you adjusted to your new life when you’ve moved?

Detailed Financial Picture – August 2014

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July’s Numbers

As of August 11, 2014, we are $429,666.44 in debt (that includes the mortgage).  Without the mortgage, we’re at $16,000 in debt from our auto loan. We currently have $1,049,072.86 in assets (including our house).  Our retirement accounts are at $389,802.48. Our Net Worth is $619,406.42  (includes house and mortgage), down from $626,585.42 last month (1.15% decrease).

Until our house is on the market, I’m continuing to use Zillow’s estimate of our house – which is pretty wildly off: ~$617k vs the ~$540k we expect to list at.  I’m not ready to take that hit to my net worth yet, but that’ll come next month.  Hopefully, we’ll have a contract this time next month, and on our way to being “home” less.

Daughter Person and I are living at my mom’s, and Dad will be joining us on Wednesday.  The house is as ready as it’s going to be for listing and showing. We likely won’t be back until we have a contract.  The garage looks like a personal storage facility, but I’m not paying extra to store stuff we’re moving, just to pay the moving company even more to retrieve it from that location.  They can just pick it up from the garage.

We’ll be able to pay the movers in stages: moving into storage, storage by the month (1st month free!), then moving from the DC area to our new home in Pittsburgh – once we have one.  So, hopefully, we won’t need to borrow from our line of credit.  My mom’s generosity is astounding to let us live here rent free.  She’s still refusing to let us buy groceries, but I snuck a few into the fridge and cabinets this evening.

Debt (in the order we’re paying it down):

  • Line of credit (8.75%): $0.00
  • Chase (4.99% for life): $ 0.00 
  • Student loans (aggregated 4.21%):  $0.00 
  • Car loan (0%): $16,000 (-500.00)
  • Mortgage (4.125%): $ 414,666.44 (-711.30)

Total paid off in July: $1,211.30