House poor

[Anonymous]

OP, can you refinance to a lower interest rate or to a 30-year loan to improve your cash flow? You were smart to buy near great schools-- your house will hold its value. As you are doing, continue to only do the home repairs that are absolutely necessary but keep up the home maintenance to avoid larger problems down the road. You could buy some rugs to cover those old floors.

[Anonymous]

Anonymous wrote:Have you refinanced since you bought? Rates are so low right now, you might be able to lower your payments that way.

You should still be getting step increases with federal employment--unless you're at the top of your grade.

after the first few years, you only get a step increase every 3 years, then every 5. And it's a small amount. Basically, you get about a 1 percent increase in salary every 3 years. That's not a lot. Most people in the private sector are getting about a 3 percent raise each year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Have you refinanced since you bought? Rates are so low right now, you might be able to lower your payments that way.

You should still be getting step increases with federal employment--unless you're at the top of your grade.

after the first few years, you only get a step increase every 3 years, then every 5. And it's a small amount. Basically, you get about a 1 percent increase in salary every 3 years. That's not a lot. Most people in the private sector are getting about a 3 percent raise each year.

Ha! FYI, it's not 2006 anymore.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Have you refinanced since you bought? Rates are so low right now, you might be able to lower your payments that way.

You should still be getting step increases with federal employment--unless you're at the top of your grade.

after the first few years, you only get a step increase every 3 years, then every 5. And it's a small amount. Basically, you get about a 1 percent increase in salary every 3 years. That's not a lot. Most people in the private sector are getting about a 3 percent raise each year.

You are wrong on both counts.
Step increases are every year for steps 1-4, every 2 years for steps 5-7, and every 3 years for steps 8-10.

The increase between steps ranges from 2.5% to 3.3%. That's more than the last COLA we did get back in 2010.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Have you refinanced since you bought? Rates are so low right now, you might be able to lower your payments that way.

You should still be getting step increases with federal employment--unless you're at the top of your grade.

after the first few years, you only get a step increase every 3 years, then every 5. And it's a small amount. Basically, you get about a 1 percent increase in salary every 3 years. That's not a lot. Most people in the private sector are getting about a 3 percent raise each year.

Private sector here - 2% total raise since 2008, not 3% per annum - many friends in same boat

[Anonymous]

We shopped around to refi when our mortgagee (wells Fargo) offered a refi that wasn't as good as we wanted. We got some quotes that Included closing costs, and better rates. We then went back to our mortgagee and said we want you to modify the loan to this lower rate or we walk and refi with the other bank. It worked. So no closing costs, just a lower rate, we did this about a year after we had refied, this could be a low cost option.

[Anonymous]

We're in the same boat, although DH is in the private sector (and still hasn't gotten a raise worth a bucket of warm spit in several years). This is always a tough time of year for us, b/c we've been inside, staring down our home's zillion imperfections, all winter. It gets better once I can get outside -- where I then agonize over the sad state of my yard.

For us, we've decided to hunker down and eat a lot of beans and spaghetti. I keep telling myself that the short term may suck, but the long term will be better. Eventually

[Anonymous]

Anonymous wrote:Sorry, OP, that sucks. Everyone on here tells people: (1) buy/rent in a great school district; (2) keep your commute short; and (3) be financially conservative with your housing payment.

It's tough to hit all of those, though. Usually, something has to go!

You forgot rule 0 around these parts: BE RICH!

Seriously, though we are about to go down this path. Wrong idea? Ugh, what do you all mean by house poor? I mean, we have a very good grasp on our actual spending, are happy with the amount we're putting toward retirement/college savings but will only net around 2-3 k per year once we start paying for childcare for 2 (will last for 2.5 yrs). This is assuming no raises and not counting the tax savings. Still a terrible idea?

[Anonymous]

I've been there and was there for a long long time. One income fed salary, plus rental properties, made me feel loke the shoemaker who's kids don't have any shoes. 20 yrs later it doesn't suck anymore. Just keep looking at the big picture

[Anonymous]

Anonymous wrote:

Anonymous wrote:Sorry, OP, that sucks. Everyone on here tells people: (1) buy/rent in a great school district; (2) keep your commute short; and (3) be financially conservative with your housing payment.

It's tough to hit all of those, though. Usually, something has to go!

You forgot rule 0 around these parts: BE RICH!

Seriously, though we are about to go down this path. Wrong idea? Ugh, what do you all mean by house poor? I mean, we have a very good grasp on our actual spending, are happy with the amount we're putting toward retirement/college savings but will only net around 2-3 k per year once we start paying for childcare for 2 (will last for 2.5 yrs). This is assuming no raises and not counting the tax savings. Still a terrible idea?

Are you earmarking some funds for housing-related expenses?

[Anonymous]

OP, we spent too much when we bought our first house in a town outside of DC and it was a struggle for years. Eventually we moved up to DC and rented the house out because we couldn't afford to sell it. (This was before the run up in housing prices.) I could have kicked myself for having bought that house.

But eventually we made more money and the house picked up in value and we sold it 19 years later at a $150k profit, which we are using to fund our kid's college education. I still wish we hadn't bought it but I also realize that we never would have socked away that much money on our own. (dh and I don't see eye to eye on saving money. He would never have agreed to be that aggressive about saving.)

This all is to say that while it sucks now, just keep hanging in there. You may be able to sell it for a lot more down the line. I know that doesn't help now though.

[Anonymous]

Do you think you/spouse could do some of the repairs on your own? Often labor charges are a big component, so you may be able to save there. Also shop around A LOT -- I've found prices for most repairs vary widely.

I'm not saying climb up on the roof and replace the shingles, but a lot of the smaller stuff can be done on your own if you read up on it first.

[Anonymous]

OP here. I really am touched by the empathy and suggestions offered on this thread. Thank you all so much.

To the PP who talked about shopping around for a refi: that may be a good idea for us. When we refinanced with no costs it was also through Wells Fargo. The rates went down after we started the process and we asked them if they would lower the rate. They said no and we took that as a final answer. It probably would have been better to be more aggressive about it. I'll check the rates again and see if I can find another no closing cost deal. Every little bit would help.

To all the PPs who posted about their past experience. It really helps to hear your stories from more years down the line and makes me feel better that maybe, just maybe, we didn't make a huge mistake. And, yes, beans and spaghetti are not a bad idea!

To the new home buyer: I worry that your 2-3K a year does not leave enough for house repairs and maintenance.

As for DYI, we are both pretty much awful on handyness, except that DH has come a long way. Maybe I should try, though. I agree with you that labor is such a huge component of the price of all these jobs. Also, it is so hard to find service providers you can trust.

Again, thank you. I thought I would get blamed and criticized here but all I have gotten was kindness and ideas.

[Anonymous]

Anonymous wrote:
As for DYI, we are both pretty much awful on handyness, except that DH has come a long way. Maybe I should try, though. I agree with you that labor is such a huge component of the price of all these jobs. Also, it is so hard to find service providers you can trust.

When I was growing up, we had to count our pennies and my mother got my father a DIY manual with copious photos, for how to take care of basic items around the house. He learned pretty quickly (and I learned beign along side him). A $20 book like that (these days I'm sure there are good youtube videos) can save you thousands.

[Anonymous]

You've got to take a longer view. 4.5 years isn't that long in terms of home ownership. 15 years from now you may be really glad you bought the house.