Since the new closing date of October 4, 2012 seems to be an actual, realistic day, I’ve been going over all our numbers to make sure we are really on target for the move. I’ll take some more pictures to post for you on Thursday as they finish up all of the big stuff (yay!!!), but in the meantime, here is where we are standing before closing on our new home:
New Home Numbers
Closing is going to be expensive. The builder offered us 3% of the final home price to put towards closing costs or the price of the house as we saw fit, so we took 1% off the total price of the home and sent 2% to the closing costs to help us out a bit. So the final price of our new home will be about $260,000. Our loan amount will be about $208,000. Here are how the closing costs are breaking down:
- 20% down payment – $52,000
- Loan Fees from the Lender – $2180
- Loan Fees from the Title Company and Builder ($410 might be waived) - $3830
- Prepaid October Interest – $635
- Homeowner’s Insurance for one year – $1122
- Property Taxes for the rest of 2012 (worst case scenario if they have it on file as improved land) - $2100
- Credit from Builder for Closing Costs – $5200
- Credit from Lender for Title – $1700
- Return of Earnest Money – $2750
- Return of Items already paid for like the Appraiser and Credit Reports – $485
- Total Money Needed at Closing – $51,732 (best case $50,000 depending on property taxes and waived fees)
We sort of expected this to be a tiny bit worse. I’m actually happy that our closing date has been pushed back 5 times and we didn’t close August 28, 2012 as originally planned. This extra month has given us time to really pad ourselves. The closing day will still hurt like a b*tch, but we’ll still have breathing room that makes us happy.
Where the Money is Coming From
Our cash is currently spread out between lots of sub-accounts and cash on hand that we’ve built up since April. The closing costs are zeroing out a few of our supplies:
- Checking (not touching it, so there is a paycheck of padding there)
- Emergency Fund (only using a few thousand, so we’ll still have a couple of paychecks of padding here)
- Taxes (not touching them of course)
- Home and Auto (using it all)
- Investments (using it all)
- Vacation (using it all)
- Fun Money for Hubby (using it all)
- Fun Money for Me (using it all)
- Self-Employment Income Padding (not touching it so it will also have 3-4 paychecks of padding as usual)
- Cash on Hand (using a lot of it for moving costs like the actual movers, backyard sodding, blinds, etc)
- Paypal (not touching it and there is a paycheck of padding there too)
What Will be Left
After closing and moving, we will want to start rebuilding our reserves. Even if we completely stop making income of any sort and refuse to cut any expenses at all (including the new ones), we’ll still have about 3-4 months of total padding in straight savings, so yay! That would give us enough time to at least sell the huge house at a loss. We will also have about 3 months of straight-up expenses in our stock investments. And another 8 months in retirement accounts. If we decided to keep the huge house, we could technically sell our current one for another 18 months of income. But the plan is NOT to stop making money of any sort…I just like worst case scenarios that still don’t completely suck…
If we just continue bringing in what we have been in the slower months of this year, we can cover all of our bills and fully fund our Roth IRA’s. If we have a low 6 months and the average of the last year over the other 6 months, we’ll also be able to pad our savings, make a few investments, payoff the current mortgage next year as planned, and even start having pure fun money again.
Overall, we are in a good spot. The rental income from our current house and from our roommates already covers 25-35% of our total expenses (which include taxes). So we even have that padding in case the worst month of income ever decides to pop up. I’ll also have a way better idea of what is “normal” for us over the next 6 months. I really can’t wait to have a little more experience under our belts so everything isn’t a constant surprise, lol.
What are you thinking? Were your closing costs through the roof? Are you saving for a new house right now? What sort of padding do you like to have on hand?