Here are some lessons learned about buying a house before selling your current home. I'll try to add more information as things happen, since we only just closed on the bridge loan today and haven't closed on the new house yet.
We obtained a bridge loan, which allows you to purchase a new home before selling your current home. It doesn't allow you to just sell your current home at your leisure. You need to put your current home on the market quickly after your offer is accepted on the new house.
The bridge loan pays off the mortgage on your current home. It is an interest-only loan, and the monthly payment is a similar amount to our current mortgage + taxes monthly payment. When we sell the current house, the proceeds (equity) from that house will be used to pay off the bridge loan in whole, and we get any leftover money. If we weren't going to use that money for home improvements on the new house, then there might be tax implications for the capital gain, because the price of our new house was much less than the sale price of our current house. When we signed the bridge loan, we also receive a check (which is basically some of our equity) that is used as the down payment on the new house. Starting in May (a month after closing on the new house), we will have a monthly mortgage payment on the new house and a monthly payment for the bridge loan; therefore, it's prudent to get our home sold quickly.
- schneid
Sunday, March 19, 2006
Thursday, March 16, 2006
We Are Moving!
In case you didn't already know it, I left GE Healthcare and returned to working at Tellabs in November, 2005. It's without a doubt the best (and easiest) decision I ever made. Except for marrying my wife, of course. And having kids. So it's the third best decision that I ever made. The drive from our current home to Naperville is 65-75 minutes each way, and I've never cared much for a long commute. I would much prefer to spend the time with my family or even pouring lemon juice on my paper cuts. But I digress...
Based on our criteria of nearness to work, great schools, and reasonably affordable houses, we narrowed down our search to Batavia and Geneva. Naperville is out because most of it is not affordable, and the traffic is ridiculous where it is affordable. Oswego (where we used to live) is too far, Aurora and North Aurora have poor schools, etc. etc. So we found a house in North Aurora. But wait, you said North Aurora had poor schools. Well, there is a small pocket of North Aurora, 75 houses to be exact, that butts up against Batavia and is in the Batavia school district. The houses on the opposite side of our own street are in the North Aurora school district (Schneider Elementary School, to be specific). My friend Greg T. lives three houses over and has about 12 kids and a pony (or is it a Great Dane?), so it will be fun for our families to get to know each other. They built their house and really like the neighborhood.
We actually signed the contract on the new house before putting our current house on the market. We obtained a bridge loan and were prepared to move quickly in case something good came up. Well, something good came up. For the first time in three months, a home was available in our preferred neighborhood, and it was listed about $30,000 under market price. In fact, we bought it for $60,000 less than a house we had looked a week before. So the answer to our question of "Should we buy a cheap house or a nice house?" was "Both!". There were three offers on the house within three days of going on the market, and we just barely won with our offer over the asking price, no contingency, and closing by the end of the month. We take possession on March 27, and our own house just went on the market. We hope to close on our new house in a couple of months and complete our move to the new house in early June when the school year ends.
I can't even begin to list all the great features of our new house. OK, I'll try. It's in a great location next to a country club, a large wooded cemetary, Marmion Academy, and the Fox River. So it's not in the middle of a sea of houses like our current house. There are two parks within two blocks. We live about 1/4 mile from the Prairie Path, which also rans almost right by my office, so I could ride my bike to work. It's a 15 minute drive from my office.
We are 5 minutes from downtown Batavia, 10 minutes from downtown Geneva, 7 minutes from I-88 (the house is north of Butterfield and just east of IL-25 if you want to see it on a map), 20 minutes from the Fox Valley mall, 10 minutes from the grocery store, and only 10 minutes from my weekly poker game. Heck, I can host the game myself now that I live near the other guys.
Our lot is 180 feet long, so we have a huge back yard. The house has a pretty large front porch, a large paver patio, and two swingsets, one of which is big and has a tornado slide. There is a three-car garage, and in the house, running the entire length of that garage, a huge 20x7 laundry room with an exterior door. The family room is pretty big and the kitchen is decent. The kids' bedrooms are large and both have walk-in closets. The master bedroom is a huge T-shape, 20x14 and 15x9, with a tray ceiling in the master and a cathedral ceiling in the sitting room. The master bath is large and has a separate tub and shower, actually a separate room for the shower and the toilet, a dressing table, plus a 8x11 walk-in closet.
The basement is huge and very open, since the stairs and mechanicals are next to walls. We plan to finish it with (approximately) a 13x10 bedroom, 12x10 full bathroom, a large storage area, and a 30x25 (maybe 35x25) rec room.
The previous owners have dogs, rabbits, and birds, so we're going to remove every bit of carpeting from the house and replace it, as well as repainting everything, and getting some of the floors redone before we move in. That's going to take some time. I will drop off a box or two most mornings on my way to work, so when we finish the actual move, we will just have movers take care of all the furniture.
We're very excited and can't wait to get in there and start working.
- schneid
Based on our criteria of nearness to work, great schools, and reasonably affordable houses, we narrowed down our search to Batavia and Geneva. Naperville is out because most of it is not affordable, and the traffic is ridiculous where it is affordable. Oswego (where we used to live) is too far, Aurora and North Aurora have poor schools, etc. etc. So we found a house in North Aurora. But wait, you said North Aurora had poor schools. Well, there is a small pocket of North Aurora, 75 houses to be exact, that butts up against Batavia and is in the Batavia school district. The houses on the opposite side of our own street are in the North Aurora school district (Schneider Elementary School, to be specific). My friend Greg T. lives three houses over and has about 12 kids and a pony (or is it a Great Dane?), so it will be fun for our families to get to know each other. They built their house and really like the neighborhood.
We actually signed the contract on the new house before putting our current house on the market. We obtained a bridge loan and were prepared to move quickly in case something good came up. Well, something good came up. For the first time in three months, a home was available in our preferred neighborhood, and it was listed about $30,000 under market price. In fact, we bought it for $60,000 less than a house we had looked a week before. So the answer to our question of "Should we buy a cheap house or a nice house?" was "Both!". There were three offers on the house within three days of going on the market, and we just barely won with our offer over the asking price, no contingency, and closing by the end of the month. We take possession on March 27, and our own house just went on the market. We hope to close on our new house in a couple of months and complete our move to the new house in early June when the school year ends.
I can't even begin to list all the great features of our new house. OK, I'll try. It's in a great location next to a country club, a large wooded cemetary, Marmion Academy, and the Fox River. So it's not in the middle of a sea of houses like our current house. There are two parks within two blocks. We live about 1/4 mile from the Prairie Path, which also rans almost right by my office, so I could ride my bike to work. It's a 15 minute drive from my office.
We are 5 minutes from downtown Batavia, 10 minutes from downtown Geneva, 7 minutes from I-88 (the house is north of Butterfield and just east of IL-25 if you want to see it on a map), 20 minutes from the Fox Valley mall, 10 minutes from the grocery store, and only 10 minutes from my weekly poker game. Heck, I can host the game myself now that I live near the other guys.
Our lot is 180 feet long, so we have a huge back yard. The house has a pretty large front porch, a large paver patio, and two swingsets, one of which is big and has a tornado slide. There is a three-car garage, and in the house, running the entire length of that garage, a huge 20x7 laundry room with an exterior door. The family room is pretty big and the kitchen is decent. The kids' bedrooms are large and both have walk-in closets. The master bedroom is a huge T-shape, 20x14 and 15x9, with a tray ceiling in the master and a cathedral ceiling in the sitting room. The master bath is large and has a separate tub and shower, actually a separate room for the shower and the toilet, a dressing table, plus a 8x11 walk-in closet.
The basement is huge and very open, since the stairs and mechanicals are next to walls. We plan to finish it with (approximately) a 13x10 bedroom, 12x10 full bathroom, a large storage area, and a 30x25 (maybe 35x25) rec room.
The previous owners have dogs, rabbits, and birds, so we're going to remove every bit of carpeting from the house and replace it, as well as repainting everything, and getting some of the floors redone before we move in. That's going to take some time. I will drop off a box or two most mornings on my way to work, so when we finish the actual move, we will just have movers take care of all the furniture.
We're very excited and can't wait to get in there and start working.
- schneid
Vow to Write More Personal Stuff
This does seem like a pretty convenient way to keep up to date with friends and family. I'm going to be spending a lot less time in the car and thus there will be fewer spontaneous calls from me.
So for those of you who don't give a damn about poker, please check in occasionally and I promise to post what's going on in the life of the Schneider family.
- schneid
So for those of you who don't give a damn about poker, please check in occasionally and I promise to post what's going on in the life of the Schneider family.
- schneid
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