Happy Hump Day, Dear Readers.
Welcome to Part Two of my new Wednesday series: Climbing Out Of the Big, Black Hole.
As much as I hate to admit it, my boss may have been right when he advised me not to buy a house. It seemed like a good idea at the time. My mortgage was less than my rent; very few apartments in this city let you have pets; and I was escaping The Landlord From Hell. I was depressed by the idea of going back to a communal laundry room, little dented mail boxes in the main hall, and putting that much money in someone else’s pocket every month. Wasn’t a break-up bad enough?
To be fair, my deceptively new-looking hundred-year-old house behaved pretty well for the first three years. I dealt with the little catastrophes any home owner experiences–the previous owners didn’t properly seal a shower stall, so it leaked and made a big mushy hole in the dining room ceiling. There were no outdoor lights in the front of the house. The fridge leaked. But all of these things were easy to fix.
There’s all the new expenses apartment dwellers never have to deal with. Property and school taxes. Higher utility bills. Water and waste bills. The lawn mower, snow shovels, etc. you never needed before. The responsibility of fixing whatever breaks. But for the most part, it still seems worth it…most of the time.
However, this year my house must have heard that I was determined to get out of debt by 2012, and decided to respond by turning into a money pit. I finally got the leaky fridge situation fixed, for once and for all, only to be told that my stove could go at any time. Then the hot water tank died, leaving a small flood and a very big mess in the basement. When the repairmen came to replace it, we discovered that the previous owners had blocked the old tank in, so I had to pay for a conversion to electric heat and a relocation for the new tank. Sigh….
Then the talk of city-wide flooding began. At first I ignored it, telling myself it wouldn’t be that bad. But since my basement flooded last year just because it rained hard for a couple of days, I finally accepted that I had to pay attention. So this means even more money (probably around $4K including tax) to have a sump pump and backwater valve installed. For those lucky enough not to live in flood country, these handy devices keep water and sewage from coming into your home when the City’s drains are overwhelmed. Having them installed will greatly ease my mind, and add to the resale value of my home, but wow! What bad timing.
And now a belt is going on my furnace….
Owning a home makes one grow up very fast.
How about you, fellow home-owners? Did owning a house end up putting a huge crimp in your wallet? Is it worth it in the end?
I think it’s worth it in the end…remember that you are gaining equity with each improvement (or repair), especially if you plan on staying there for awhile.
We’ve been pretty lucky so far – other than ice dams leaking into the ceilings, but you never know what’s coming next, I guess.
Homeownership – the American dream, right? 😉
Have you thought about bringing a contractor in and doing a reno and just having the whole house checked out?
I’ve, obviously, read the other stuff you’ve posted on your debt situation and being someone who is uncomfortably in debt myself, I relate. And I am not sure if by DEBT free, you also mean “mortgage free” —
It might be wise to look at doing the repairs and rather than trying to cover the cost with separate debt, just renegotiate your mortgage. You can often do that AND it doesn’t increase your mortgage payment by very much at all. You can even keep your amortization the same as it presently is…. so if you have 15 years left on your mortgage you’ll continue to have 15 years left.
Just a thought. The value of your house will have increased so you’ll have room to borrow off the house to do the work that belongs to the house AND it will further increase the value of the house so it ends up being win win really. Especially if you decide to sell the house in a few years and upgrade with “the boy.”
It’s worth it…the housing market in Winnipeg right now is very tight. It may not mean much if you don’t plan to sell in the near future, but just know that if you suddenly had to you’d be much further ahead than when you bought.
We bought our house just over a year ago and have put some work into it. Then a water main broke on our property which we had to replace to the tune of $3000. We live in a flood-prone area of the city (Norwood Flats) and don’t have a sump pump right now – nor can we afford it at the moment…(just completly re-did a bathroom and are currently re-doing a bedroom). We were fortunate and got NO water in the basement last summer – even as the neighbours across the lane were bailing bucket after bucket from their basement.
We are keeping our fingers crossed and our bodies strong (for sandbagging) this spring…;0))))
Thanks for your comments, everyone.
@ LAIKI–Ice dams? That sounds horrible! Owning a home seemed to be my only choice rather than a dream, but I get what you’re saying. Thanks for the reassurance.
@ Kim – the idea of doing that kind of full-scale reno gives me the shivers! I’m sure a contractor could find reason to spend over a million in here, and I hopefully will escape this city within the next five years. But your idea of renegotiating the mortgage is great. It’s up for renewal next May, and could pay for replacing the furnace and the deck.
@ Lisa – I hope you’re right, as we do hope to leave the city within a few years. I can’t take much more of the cold and the floods. I feel for you with your flooding–I’ve certainly been there! Good luck next spring. Let me know if you need help.
If your mortgage is up, seriously give thought to a (convertible) variable mortgage. The rates are lower, and since there is no sign that interest rates will go up a lot in the near future, you’ll make greater gains in paying off that debt.
(And this comes from someone who likes security, is a risk-avoider and my first mortgage was fixed.)
And it is worth it in the end. While you still have greater payments (utility bills, shovels, etc.), you also have greater equity. I’m sure you’ll come to this conclusion when you do sell your house! (Much to my chagrin :()
It’s worth it. As you know, we bought our first house this summer and sold our condo. We had to replace the water heater/AC/Furnace a month after moving in, and now we have a leak somewhere, but we knew there would be costs. In the condo we payed fees and assessments (money not going into our equity) and in an apartment you have no costs and no equity at all.
Kim has a point. You might want to look at refinancing for renos. Not interior design, but since you are having the pump added, have someone check out your roof and windows at the same time.
As my boss CONTINUALLY tells me as I regale him of my adventures in my new house, “Welcome to home ownership.”
Yes, Elspeth. That is exactly what I meant. Adjust the mortgage to fix the stuff that could cause big disasters down the long run as with your current possible preventative repair with the sump pumps etc. Not for interior decorating as such. But the safety stuff and the stabilizing stuff. And the stuff like windows where you’ll save a ton on your heating bill over time with better efficiency.
And you can re-negotate your morgage at any time. I just did mine yesterday after only a year.
@ Kim and Elspeth – thankfully, my roof was completely redone in 2005 and my windows are mostly new as well (think there’s only threee little ones that need to be upgraded, so as far as I’m concerned, that can wait). But for the furnace and the deck, it’s an option. However, it may make more sense for me to save up for those and pay them off in cash than adding that cost to the mortgage. (Which I could do in a year once I’m out of debt.)
@ TS – thanks for your comment, but after what happened in the States, I could never go with a variable mortgage. There’s no guarantee that insurance rates won’t suddenly change. It’s just too risky for my comfort level. I’m a worrier. Hence, the backwater valve, etc.
First, it is hard to compare US mortgages with Canadian mortgages. We have weathered the financial storm just fine, and in fact housing values have continued to climb.
Second, the reason the US market crashed had nothing to do with variable mortgages. It had to with ridiculously-amortized mortgages (wasn’t it 50 years?) making houses “affordable” to people who really shouldn’t have had homes. Pair that with the “buy now” and “debt is okay” society, and it was a disaster in the making (as MANY people, including myself, predicted).
All you need to do is be cognisant of prime rates, which haven’t changed that often. (So don’t require a lot of checking.) However, if this is something that would indeed keep you up at night (as it would several folks) I understand why you would want a fixed mortgage. I just wanted to make sure you were properly informed (my mission in life with so many things) and that you really do need to consider the term you’re locking in for if you do have realistic plans to sell your house in the future! (And not be able to port your mortgage to another house in the bank/credit union’s jurisdiction…)