@Westwood: Yeah, it would be a pain later to fix. It’s a good point.
@ElbieKay: Yes, in some ways, it is pointless to be principled on this, but I just have so much anxiety over this.
Thank you bees for all the advice and insights. What I am really struggling with is 1) the reality of the costs of buying the type of home we want and 2) how much our living expenses are about to increase.
We currently rent a very cheap duplex that is the perfect size, in a stellar location and rent has not been increased for the past 4 years. I seriously love living here and would offer to buy it if the landlord were willing to sell (unfortunately we asked, she said no). We cannot afford to buy in the area we rent because homes are ridiculously priced (it’s the wealthiest part of the city). Even though I love our place, Darling Husband and I agreed we are ready to buy a home and began to the process a few months ago.
Our initial budget was about $200,000. I thought that was plenty and it would keep our mortgage close to what we pay in rent. Well…the reality is that in our city, the average home costs about $255,000. You can buy a house for $200,000, but it is really out dated or in a bad neighborhood. We just didn’t want to put the time and money into fixing up a home. We also didn’t find something that we fell in love with while looking at 20+ homes.
So, we started the new build process. The initial sticker price was $215,000. Obviously that isn’t what you pay…but I didn’t expect it to jump up so much. So, after basic upgrades, selecting an unfinished basement and having air conditioning, we were up to $250,000. Then the design process came along. Going into it, we wanted to spend no more than $15,000 on upgrades ($265,000 total on the home). After what we thought were basic selections/upgrades, we are now up to $270,000. That is way more than I expected to ever pay for our home.
Darling Husband pointed out that we were approved up to $370,000 (though we did not want to spend anywhere near that). We can definitely afford the home at $270,000 and will still be able to save for retirement, vacations, pay student loans, etc. I think I am still in sticker shock and reconciliation mode.
Sorry for the long vent 🙁