Home Loan & Mortgage: Our Dirty Details

I’m sure you all know by now that I don’t have any issues with sharing our financial information. I can’t help myself.

Why do I do it? Is it to gloat or get pity? Nope, I do it in hopes that by sharing our actual numbers, it will help others. While I don’t expect anybody else’s financial situation will mirror my own, I still think it can help.

Whether it’s an example of what not to do, what to do, how small changes can add up or just for entertainment purposes…it might benefit somebody out there.

Since we just bought our first house ever (yay!), I’ve just got to share those numbers with you all. Just a few years ago, I thought we would never be able to own a house. Now, after a ton of hard work and persistence (not always 100% on track) it’s become a reality.

Home Loan:

USDA Guraranteed Home Loan
Down Payment: Big Fat Zero
Asking price: $169,000
Our offer on the house: $170,000.00 with closing costs paid by seller

Mortgage Payments:

Lender’s guess: Between $1,025 and $1,050.00
My safe guess: $1,100.00

Actual amount: $999.39

Note: We’re only paying $124.39 more than we were paying to live in our tiny 2 bedroom apartment with no garage. Not too shabby.

Interest & Loan:

Loan: 30 year fixed
Interest Rate: 3.75%
Annual Percentage Rate (APR): 4.319%

Mortgage Monthly Payment Breakdown:

Escrow: $196.03
Interest: TONS
Principal: $999.39 – Escrow of $196.03 = 803.36 – Interest

Paid Front:

Earnest Money: $1,000.00
Appraisal: $400 appraisal
Home Inspection: $330.00

Total = $1,730.00 *$1,400 was refunded after closing

The Loan:

Purchase Price: $170,000
Guarantee Fee (PMI through USDA): $3,469.00
Total Closing Costs: $4,250.00 *paid by seller

Total Loan Amount: $173,469.00


There’s still some stuff I’m not too sure about. The guarantee fee for example, is that a one-time thing? I hope it is, otherwise we’d be really screwed. Should I know this? Yes. Is it really irresponsible of me not to know this? Yep.

Also, if our property taxes raise in the future…will our monthly mortgage payments increase? Or will the amount applied from our payments to the escrow account increase and the amount applied toward our principal decrease? I’m so bad, I know it. I’ve already been kicking myself in the ass, so don’t give it to me too bad. 😉

Just for fun: closing took us 1 hour and 10 mins, consisted of 164 pages, 78 signatures (of mine), 87 signatures (of Honey’s) and around 60 initials (for each of us). We got free Dr. Pepper and 2 pens (without stealing them).


What do you think? Good, bad, awful?

About Jen Perkins

Likes: saving money, being debt free (aside from our house), zombies, travel, getting money, blogging and dogs. Dislikes: debt, being broke, bunnies, wasting money, not having enough money to travel the world and paying interest. Facebook  ♥  Twitter  ♥  Google+  ♥  RSS


Home Loan & Mortgage: Our Dirty Details — 25 Comments

  1. My husband and I were house searching for almost a year when we decided that we just didn’t have enough in savings. We even had a full 20% down payment (borrowed). How much do you recommend in a savings account before buying a house?

    • That’s a tricky one, because it really depends on the house. Our house was move-in ready and only appeared to need a washer/dryer and a refrigerator. But little things have popped up everywhere, plus the sewer pipe had a tree growing into it. You never know what’s going to happen.

      I’d much rather have money to cover the crazy stuff that pops up, instead of putting money down. From our experience for a move-in-ready house…I’d shoot for at least $5,000 to be safe. :-)
      Jen Perkins recently posted..Schools Letting Kids Spend Parent’s Money Without PermissionMy Profile

  2. This is a great breakdown of prices. My nephew is looking to buy a house for the first time but he’s having trouble crunching the numbers. I’m going to recommend this post (and your blog) to him.

  3. Congratulations on getting your first home. I think as long as you have the money to pay your mortgage and property taxes and the ability to save yearly for home maintenance then you are set for the house. Stuff always creeps up and that’s why we budget our money so we are setting aside for an emergency etc. You must be over the moon that it’s only a bit more than your rental payments were.. amazing that is. Mr.CBB
    Canadian Budget Binder recently posted..Budgeting With Mr.CBB Got Us Back On Track!My Profile

    • Thanks Mr.CBB. :-) It’s amazing that we’re actually able to have a house for just a bit more than renting. Living in a house is so much nicer than apartments.

  4. First of all, good job on getting the mortgage and making it happen! I’m not sure what a Guarantee Fee is, but I’m pretty sure that’s a one time thing. Don’t feel bad. 8 years ago when I got my house, I had no idea what half the fees were or meant (which means I probably got ripped off).

    YES! Your Escrow will go up as your property taxes go up. Be careful of getting a bill to “make up the difference” when they do your Escrow analysis one year from now. They did that to us and we got a bill for $600!! I actually to call the bank to fight it by proving that they 1) calculated it wrong and 2) that my house wasn’t going to go up in value by that much. This would be a good reason to keep the emergency fund ready for action. Feel free to send me an email if you’ve got more questions about this.
    My Money Design recently posted..Cutting Back on Our 403b Plan for More Dividend Paying StocksMy Profile

  5. With such a little difference from your rental price, it makes total sense to buy. Sorry it was so rocky, but hopefully smooth sailing from here on out. Our escrow went up this year due to increased insurance costs:( I guess when the whole state burns up in forest fires it hurts all of us, even if we don’t live in the woods.
    Kim recently posted..Reasons to Love Your Used CarMy Profile

  6. Sometimes it makes sense to buy, sometimes to rent. It depends on your circumstances. If your interest rate is fixed at 3.75% for 30 years you will be laughing if and when the US economy returns to healthier times so you have done well.

    But if you need to move suddenly, is your mortgage portable? ie can you use it for a new house? This is where renting has its advantages – you can up-sticks and move quickly.
    John@MoneyPrinciple recently posted..Buy what you need when you need it!My Profile

    • I don’t think our mortgage is portable, especially since it’s a USDA home loan. We have pretty much lived in the same city for most of our lives, so I don’t expect to relocate any time soon. Although I would love to move out of the country one day, but that’s going to take a ton of planning and lots of money.
      Jen Perkins recently posted..Getting the Most From Your Life Altering MomentsMy Profile

  7. We’re in the midst of the process too and I am also keeping a list of expenses to post when everything is finished. *Crossing fingers it happens before Christmas since we have been working on this since August.*

  8. I thing that you should sufficient balance in your saving account if you are going to plain to buy the house ..this will be more reliable for the buying this.

  9. Congratulations on your new home, Jen. I agree with “My Money Design’s” comment. It’s true. That’s why I advise most of my clients to keep an emergency fund for this kind of situations.:) So how’s it going now?
    Homes for Sale in Springfield MO recently posted..Prepare For Your Open HouseMy Profile

    • It’s definitely important to have some extra money set aside when buying a house…you never know what’s going to come up.

      So far things are still going good, though it’s tempting not to fix/replace many things right away. 😉
      Jen Perkins recently posted..Net Worth Update~ March 2013My Profile