Thursday, April 26, 2012

Home Ownership

Nick and I purchased a townhouse in 2009 literally 2 weeks before Dannika was born.
We searched for about 2 months, put offers in on numerous properties before finally getting the current home we live in now. 
Our house is nothing fancy or nothing huge. 
It's the perfect place for our small family to live in for now.
I always tell people that this is our "starter home" and not our "forever home".
However, the location of it is AH-MAZING.
It sits in the heart of south Orange County and for people who enjoy longs walks and runs, it is roughly a 7 mile run straight to the beach.
It is also on the outskirts of historic downtown San Juan Capistrano and literally walking distance to some of the most AMAZING restaurants I've ever eaten at.
I've turned into a bit of a "restaurant snob" since living here and the thought of ever eating at a chain restaurant like Chili's or Outback do not do anything for my taste buds anymore....but that's how amazing the food is at these restaurants.
So since the location is so awesome, and at one point (2005) our little townhouse sold for half a million dollars (real estate in California near the beach is insane), we plan on keeping it for a little while, renting it out, and possibly make it our summer home for when Nick retires from the Marine Corps and we move back to Texas :-)

I've had a few people ask me about buying a house and I thought I'd blog about it.

A lot of people are curious about prices too, and while I don't like talking about personal finances with the world, I think talking about the worth of our home and what we purchased it for is relevant.

Let me just add that I am not a real estate agent nor am I some finance guru.
I am however certified through the Marine Corps as a Certified Financial Specialist :-)...I be fancy.
I'll break everything down into 5's.

{5} PROs of home ownership:
1)'s YOURS

2) Don't like the tile in your bathroom? you can change it. Don't like the floors? you can change it. Don't like the appliances? you can change it (you get the point).

3) You're not throwing your money out the door for rent. Your monthly mortgage payments are going TOWARDS a loan that belongs to you. You're basically paying yourself back and not someone else's mortgage on their property.

4) It's great for your credit score and boosts it tremendously

5) It is an investment into your future

{5} CONs of home ownership:
1) If you're a military family like ours, it makes relocating a TEENY bit more difficult. There are government programs out there to help homeowners out if they are being forced to relocate due to the military, but it can still be a big headache.

2) There are costs to owning a home such as homeowner's insurance, home warranty (if you choose to get one which I HIGHLY recommend), property taxes, and homeowner's association (HOA) fees.

3) You have to pay for or do you own repairs. This is why I recommend a home warranty, but let's face it, insurance and home warranties only cover so much. Think of that time when you lived in an apartment and your toilet over flooded. You just call your maintenance department and they send someone out to fix it for free.

4) Utility bills. Gone are the days when you sign a lease and water is covered in it...or sewage...or water and sewage...or trash...OR WHATEVER. You pay for all of it.

5) It's a long term investment (for most). If 5 years later, you just feel like moving to a different place or a bigger place, it's not as easy as ending your lease and moving out.

{5} Things Nick and I Considered Before Buying:
1) What can we afford? Nick and I were looking in south Orange County close to the coast and close to base so we knew that because home prices are steep here, we wouldn't be moving into a 4 bedroom single family home. Homes like that are in the millions here (INSANE, right?), and even an affordable one, you have to drive further inland and further from the coast. We actually saw a listing for a one bedroom condo here going for 1.2 million dollars, and there was nothing spectacular about this condo except the fact that it had a teeny tiny bit of a ocean view. Here is a Newport beach condo for 1.3 million (15 minutes north of us):

2) What is your budget. I suggest using a mortgage calculator (google it), use an average current interest rate (assuming you have OK credit) and figure out roughly what you are willing so spend monthly. Don't forget that you have to consider property taxes, HOA fees, and utilities into that monthly payment.

3) Is this purchase going to be purely an investment or somewhere you plan on raising a family and living in long term? This will have a large determining factor on what kind of property to buy. Nick and I purchased strictly as an investment. There is no way in hell we are living in California forever (sorry Californians, but your cost of living and education in this state is horrrrrrriiibblllle!). With that in mind, we had no problem settling on a small townhouse. If this was going to be a home we planned on settling down in, we would have definitely purchased a 4+ bedroom house. Of course what we paid for our townhouse, you can buy a 5 bedroom home with a pool and a ton of land to go with it in Texas (but we won't go into that).

4)  Do you have any money saved up to do improvements to a property, or do you want to buy a "turnkey" home? A turnkey home is one that you can buy and move into immediately. Nick is a pretty handy guy, but we did not want to waste any time moving, so a fixer upper was out of the question. You can find lots of good homes that need some work. You just have the outweigh the costs it's going to take to fix it up. Nick and I wanted a townhouse that had wood floors, granite countertops, stainless steel appliances, recessed lighting, a fireplace, and custom tiling in the bathrooms. Basically, we wanted a completely upgraded house that we wouldn't have to do much extra to. 

5) Can you get approved for a loan? Interest rates are insanely low right now, and just because you have a full time job does not necessarily mean the bank is just gonna give you hundreds of thousands of dollars to buy a house. Make sure you credit is in tact. When we first applied for the VA loan, Nick and I both had NO idea that we had outstanding fines on our credit report and it was preventing us from getting approved. I seriously had a cox cable bill from when I was LCpl living in the barracks that wasn't paid and 2 parking tickets from Oceanside that I don't ever recall getting! Make sure you check your credit yourself the embarrassment of getting denied ( was embarrassing for me at least).

I hope this helps anyone out who is struggling in their head with the thought of buying a home.
It was a big decision for Nick and I, but so far, we have never been happier or more blessed!
Interest rates are ridiculously low right now, and I think that you're doing yourself an injustice by not taking advantage of it!

We looked at what our townhome had sold for in the past.
In 1996, it sold for $116,000
Almost 10 years later in 2005, it sold for $452,000.
Nick and I financed our townhouse in 2009 for $278,000 at A 5.5% interest rate (which at the time we purchased was good).
We looked at what other homes in the neighborhood were selling for, and decided that putting in an offer at $278,000 was reasonable and competitive to the neighborhood.

We recently refinanced our mortgage for a lower interest rate.
We were locked in at 3.78% which brought our mortgage payment down A LOT!

I guess in the end, you have to tell yourself that there is ALWAYS going to be a better time to buy a house, but if you keep waiting for the right time, you may never end up going through with it.
Nick and I thought that 3 years ago was the perfect time to buy, but recently, the townhouse next to us sold for FAR less than what we purchased ours for.
We were kicking ourselves in the butt saying, "we shoulda waited till now."
We were telling our neighbors this, and they both laughed at us and told us that there will ALWAYS be a better time to buy a house, and that when they saw what we had purchased our house for, THEY said the same thing that we did.

In the end though, we couldn't be happier with our decision....even with the ups and downs, the water damage, plumbing problems we dealt with, etc.
I'm thankful that Nick is such a handyman because he has literally saved us THOUSANDS of dollars on upgrades that he did himself.
After all is said and belongs to us, and it's the house that I brought Dannika home to from the hospital.

We had an amazing real estate agent who made the process so stress free for us, and I also have a few friends that do real estate that are just as if not better than the one we used.
Ask me if you're interested!!!

And if you're a real estate agent...facebook me your website, and I'll post it on here!

Nick did our backsplash in our kitchen

The finished product. He saved us roughly 800 bucks by doing it himself.

Last year, we had some SEVERE water damage in our home. This is a hole that was made in the ceiling with just a light finger prick...yeah...that's how wet it was...after we emptied out our savings to fix it and pretty much gut out entire house from ceiling to floor....we have a nicer ceiling, installed a ceiling fan in the living room, got higher quality wood laminate floor. Oh and our HOA reimbursed us for some of it...I suppose some is better than none. It was a blessing in disguise though cause we got to get rid of the hideous popcorn ceiling as well.

This hole in the ground is actually INSIDE our house in Dannika's room. The pipe that needed fixing was UNDER her room.

Nick is installing a better quality fence in our backyard.

Nick also build this nice wooden awning for shade in the backyard. Him doing it himself also saved us about $2,000.

The first part of the fence!

Sunny and Nick. Thank you Sunny for helping us build our fence!!!!!

They're so manly....


  1. Very imforvative! We bought a house in NC hoping to keep it for the duration of Kev's career, assuming we will live off BAH everywhere else. So far, so good, but I do hate not painting walls!

  2. The sink is perhaps one of the most very important home devices inside your kitchen along with your oven together with freezer or fridge. These three equipment make up your kitchen area; they are, in reality, the whole kitchen countertops.


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