I’m not to going to sugar coat anything. Paying off your house the way we did it is not fun or easy. There have been many times I’ve regretted what we’ve done. Not because it isn’t right, just because I’m a softie and it’s been too hard. I fear for what we’ve done to our kids, ripping them from what they know and making them ride this ride with us.
THE REALITY CHECK
We had a beautiful home in a very nice area. But, that’s all we had. We were living a lie thinking we were living within our means. We were strapped financially and finally came to realize a few things:
- We were living paycheck to paycheck (and still are).
- We could afford our bills, but there wasn’t room for anything else. This hit me hard when we had a family wedding out of the country and we realized we weren’t going to be able to go. We did end up going, but only because of the kindness of my aunt.
- I had student loans and my oldest was in 7th grade. It wouldn’t be long at all before HE would be in college! That seemed backwards to me.
WHAT WE DID
We woke up one morning and as we were talking about our usual topic- finances- we came up with a crazy solution. We had seen that foreclosures were popping up all over in nearby counties for under $40,000. We knew we had about that in equity in our house. We thought to ourselves, what if we took that $40,000 and bought a “fixer upper” to flip? We finished all the projects that we had been meaning to get to and listed the house. Three months later we were living in one of my mother in law’s rentals. we found a teeny tiny house for $34,000 and made it liveable. It certainly wasn’t finished when we moved in, but it was finished enough. Here’s where the excitement wore off and things got just plain hard. We lived in a constant state of renovations for about 1 year. This house needed a total remodel. There wasn’t a room in the entire 1,000 square foot house that didn’t get a makeover. Obviously $6,000 isn’t going to pay for a total makeover. So, while we were still living from paycheck to paycheck, the $1,200 we were paying toward our mortgage now applied toward drywall, paint, light fixtures and whatever else popped up. For that entire year I complained to my very patient husband. He would say every time, “You’ll see. When we go to sell we’ll make more then we could ever save in that amount of time.” We had a brand new, beautiful (albeit small) kitchen and bathroom. We redid the hardwood floors. Everything that I had been pinning on Pinterest I finally got to do to this little dollhouse. And, then, after two years, we sold it. My smart husband was right- because now we had $94,000 to work with after only two years.
WHAT CAN $94,000 GET YOU?
Well, in our blessed case, we purchased another bank owned home with that money. Our original plan was to buy another bank owned home for around $40,000 again. This time, we’d have the money already to fix it up and wouldn’t have to live so financially strapped again. Also, in doing that, we were planning to pay off my student loans of $21,000. I saw this cute house in a neighborhood we knew nothing about pop up for sale. It was definitely above our price range. We wanted to spend $70,000 absolute max. This house selling for $97,000 on auction. And…it needed a complete renovation. Just. Like. The. Last. One. I was scared out of my mind. We considered the pros and cons and decided to go for it. And, that’s where we’re at. Not glamorous, but we’re grateful for more space and a nice, quiet neighborhood that we’re learning and really starting to love!
In my next post I’ll talk about why selling your house and buying a fixer upper is worth it. Be encouraged!
What about you, what kind of plans do you have to pay off your mortgage?