Saturday, July 27, 2013

Weekly Roundup - July 27, 2013

This past week was great.  Everything went smooth with work at least as far as my end.  We almost set a record for drilling a well but missed it because the motor ended up breaking so we had to come out of the hole to change that out.  Overall it was still a great well and despite the extra time coming out of the hole for the motor we still beat the previous well we drilled by a day.  This ended up being a 8.6 day well.  I like having really fast wells but stacking them back to back like this is going to set some high expectations.  Whenever we drill a well a normal speed they're probably going to be wondering, WTF?  But the best part about this week is that I get to go home again for a few days and go spend time with my wife.  There's a drive-in theater that's relatively close to us and we're going to see about heading over there this weekend.  I love that drive-in because even after buying food/drink and tickets it still only works out to a little bit over the price of just seeing one movie in the theater, and we get double features.

I've mentioned how my wife and I are planning on purchasing a house later this year and I was hoping to tap the wonderful resource that is the blogosphere.  I've never gone through the process of purchasing a house and was hoping to get some tips from everyone.  One thing I had a question about was how early should you start contacting banks about a mortgage?  My guess is once you're closer to actually buying but that could happen at any time after mid-August since we'll have the full down-payment by then.  Also, are there better sources than your primary bank?  I know there's other bank options as well as credit unions but since we don't currently have accounts at other institutions other than JP Morgan, any good suggestions?  Real estate agent, yes or no?  I'm sure there's plenty of other questions that I haven't even thought of so please share any advice that you have.

Thanks to everyone that mentioned Passive-Income-Pursuit this past week.  I truly appreciate it

Overcoming the one more year syndrome by Financial Samurai

Financial independence is both a journey and a destination by Dividend Mantra

Frequently asked questions about dividend investing by Dividend Growth Investor

Looking for dividends in financial services by Get Financially Integrated

What if the dividend payout ratio was bogus? by The Dividend Guy

My ten favorite Walt Disney quotes by The Conservative Income Investor

3 personal finance lessons learned from Detroit's bankruptcy by My Own Advisor

Portfolio update: Why not buy KO when everyone's disappointed by The Dividend Theory

Revisiting tracking portfolio returns by My Journey to Financial Independence

Hope everyone has a great weekend!

12 comments:

  1. Fantastic you have your down-payment for a home! You and your wife should feel very pleased. I am really not a good one to ask about buying a home. I have been through the process 3 times so far in my life. My current home we have had for 13 years and I have no plans of selling and moving. I would share that if I was in your position, I would likely not buy a home. It is all of the unexpected expenses that can deplete your finances. Your miscellaneous expenses will definitely increase. You can expect insurance, taxes, maintenance and unexpected expenses to all increase your monthly expenses. Just last weekend I had to replace a garbage disposal unexpectedly. Yes I have a home maintenance savings, but it was also hit with the need for a new washer & dryer back in November 2012. With your job, you travel and is the wife prepared to deal with the expected (sure she is very capable, but have you both thought about it).

    Loan pre-approval has it's advantageous. There are many mortgage lenders available. Visit bankrate.com for mortgage rates in your area. Max loan term should be 15-year...best! I never could afford that until several years ago and I did a refinance of 10-year.

    Location is really important. Do your homework for the area you want. Planning on a family...schools and community resources are key factors to consider.

    For perspective...I am a middled-age man with three grown children and one a freshman in high school. Been married for 30 years to my high school sweetheart. Made many financial mistakes throughout my life. Buying and selling homes are an expensive endeavor in one's life. The least times done, the further ahead you will be financially.

    You and your wife are leaps and bounds ahead of my wife and I. You both should be proud! Keep up the pursuit!

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    Replies
    1. RetireThruDividends,

      I'm not looking forward to the added expenses that comes with taxes and insurance or all of the maintenance that we are going to have to take care of ourselves. I made sure that my wife knew exactly what we're getting into since I won't be home to get a lot of the maintenance done. It's unfortunate because I know we can save money on some of the minor things. As long as they won't cause further damage to the property then I'll probably tell her to hold off on getting it fixed until I can get home again. Obviously being in Texas the A/C does not fall in that category. I'm hoping to only make one more move in our lifetime with that being to a house I design myself and we build on some property. Other than that we might get a rental property or two.

      Thanks for stopping by!

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  2. For the first purchase, I would elect to go with one of the big name banks (Wells Fargo, BOA, Citi, etc.). You can talk to each one and go with the one you are most comfortable with. Even if you don't have an account, it's no big deal, and they will open one for you on the spot just to get your business. I had to do this since my primary checking was with a different bank. Most big name banks will loan you up to 4 conventional loans.

    The first step would be to get a pre-approval letter from the bank. Then you can start looking for an agent. I don't think it's ever too early to start looking for a loan. A pre-approval is usually good for about 6 months or so before it has to be re-newed, and that's not a big deal either. The loan officer generally shouldn't have to redo a credit check or anything. In my case, they just changed the date and got me a new pre-approval within minutes.

    Hope that helps.

    ReplyDelete
    Replies
    1. I wish I had known about the pre-approval letter beforehand. When we went and saw the first few houses and they asked if we were pre-approved I could tell by the look on their face like we weren't worth their time. Oh well, I knew our money situation was good so they lost out on some commission.

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  3. One other thing -- when getting the pre-approval letter, ask for as much money as possible. Tell them to max out your loan amount on the letter. You don't have to actually purchase up to this amount, but it makes you look like a stronger buyer. In a competitive seller's market, any advantage you can gain helps. It will also save you the headache of having to get a new letter in the event your original request was for a loan that was too low. There are no negatives for asking for the highest amount, so it's a good idea to just go with that from the start.

    ReplyDelete
    Replies
    1. FI,

      We ended up not requesting as much as possible. To me that seemed to lower our bargaining power when we went to make an offer. We were approved for $750k so complaining about a few thousand difference makes you look bad to the seller. At least for me. So we went with a lower amount and just got another letter made. I really like our realtor and mortgage broker. I'm really hoping to get an investment property next year and if we move forward with that I plan on using our mortgage broker again for that transaction.

      Thanks for stopping by!

      Delete
  4. Why buy a house now at record low interest rates?

    ReplyDelete
    Replies
    1. Why wouldn't you buy at record low interest rates? That seems to be the best idea. If you're wanting to purchase and are in a position to do so responsibly then why wait until rates are back up around 5-6%?

      Delete
  5. Pursuit,

    Thanks for the mention! Much appreciated.

    I don't have a lot to offer in terms of home buying. I haven't undergone the process yet myself, and have doubts as to whether I ever will. I wish you and your wife the best through it! :)

    Best wishes!

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    Replies
    1. DM,

      No problem on the mention. If I were single I wouldn't buy, at least not now but she's getting the itch to "grow up" and get a house and children so we went ahead and started with the house. It's going to increase our monthly expenses a bit but nothing too major.

      Thanks for stopping by!

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  6. Thanks for the mention, PIP!

    When I bought my place in 2010, it was only after I had found the place I wanted to buy that I contacted the banks. Everything went very fast though. Via some online simulation tools on banks' websites I did know how far my budget stretched before I went searching for a place. If your bank doesn't have a simulation tool, maybe it is best to contact them to see what kind of budget you have.

    I hope this helps. Good luck with the house hunting!

    Matt
    The Dividend Theory

    ReplyDelete
    Replies
    1. Dividend Theory,

      We went and talked with a mortgage broker and he ran the numbers. I had played with the numbers with some online calculators to get an idea of the payments and knew that with our income we'd have no problem with the budget. I was surprised how quick the whole process has gone since we searched and already have an offer in that was accepted. Now we wait but we should be able to close in early September.

      Thanks for stopping by!

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