How We’re Financing Our Fixer Upper – The Reality of Paying for a Home

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A large part of the DIY lifestyle is being frugal, thrifty and knowing where to spend real dollars. For the longest time, we’ve shared our best tips and tricks for how to decorate for less, up cycle and save on furnishings and decor. But, there’s a whole other side to the story that we haven’t talked about yet. Recently, I alluded to the fact that I plan to open up a bit more, show you more of our real life and offer a few more glimpses into what has brought us to the here and now. I honestly don’t think we can continue to tell our story without addressing the elephant in the room – money and finances.

All winter (and it’s been a loooooong winter with a newborn), I’ve been catching up on seasons of Fixer Upper. I was super behind. The Barn-dominium?! What a cool space. Not sure the dining table for 15 was big enough… LOLOLOL Anyway…. my point is:

After hour upon hour of JoJo and Chip ripping down walls, vaulting ceilings, shiplapping anything that moves, it’s really easy to get caught up in the ‘buy this’ and ‘buy now’ mentality. Tell me I’m not alone!? Sometimes, it sorta makes me feel anxious and depressed and I find that I convince myself I need to retile the bathroom, rebuild the porch, add a hot tub and rip up all the floors. What’s $50,000? Everyone is doing it, right?

“35-hundred square feet on 15-acres for just $120,000 and yours guys’ all in budget of $300,000, you can live like over-styled KINGS!…We’re calling this the – basically-nowhere-else-on-Earth-is-this-realistic-house.”

Don’t get me wrong, I love JoJo and Chip just as much as the next crazed fan – but they sell a ‘possibility’. Sure it’s possible for us to go out and buy a tear-down fixer upper (there are quite a few gorgeous ones in Windsor, Nova Scotia!), but what is actually realistic and responsible? 

Wait. Let me re-phrase that.

What is actually realistic and responsible for us????

When I watch shows like Fixer Upper, I wonder about those things. Does it ever make sense to spend more than 100%  to essentially rebuild an existing home? If so, how would that be responsibly financed? AND, how big of a mortgage is actually TOO big? I also can’t help but sometimes feel that we’ve cheated ourselves out of the large kitchen with the island, the jacuzzi tub and the fancy mudroom.

Did we? Am I in a Fixer Upper induced state of Financial Self-Doubt?

As I’m about half way through my maternity leave, we have just paid off one of our vehicles and our mortgage will come up for renewal next summer – we will be chatting with our local credit union about our next steps. Right now, we’re using their online resources to help guide us in figuring out which questions we have such as; can we afford the house with the landscaped yard and jacuzzi tub? Should we start taking steps towards it or stay the course?

It’s funny because a few of these conversations we’ve had brought back some ‘learnings’ and ‘goals’ that reminded us of how life was when we were penny pinching to pay down debt and buy this home… (our journey was substantial and I’m planning another post on that). No matter what stage of financial health, it seems like temptation can pull us away from those core principles that helped us keep a straight and narrow path to debt free the first time around. Temptation is a sneaky bugger eh? The last thing we want to be doing in our mid-30s is taking on too much financial risk and leveraging our family’s future.

Here are some things we are keeping in mind for the next twelve months:

Our total housing costs

The credit union site suggests that one’s all in housing costs (mortgage, taxes, heating bills) should never be more than 32% of your gross income. Then a quick calculation revealed that  we are well below that threshold. In fact, we only spend about 11% of our gross income on our essential housing costs right now.

What has this meant for us? It has meant that we have been able to make a few extra mortgage payments, build a brand new shed in the yard, install new appliances, pay for much needed repairs AND save a substantial sum for my maternity leave and LBs education fund without feeling pinched. Sometimes when I go to friends’ homes and they have a pool and new fancy berber carpet and kitchen islands, I make excuses for where we live. “Ya, it’s small. It’s quaint. We don’t pay much.” And then I feel guilty because this little ‘cheap’ home has given us quite a bit of freedom.

This leads me to the second ‘oh ya, I remember this’ lesson:

Big is fun, but costs in the long run

The last time we shopped for homes, I remember being near tears walking away from a perfectly gorgeous ‘salt box’ style home with a new kitchen, dark hardwood floors, grand staircase and a master ensuite with a picture window. It was $10,000 below our highest allowable budget. We didn’t even make an offer. At the time, we had drilled into our brains that maxing out our budget with a large home would lead to financial stress and likely ruin.

We learned then (and are re-learning now) that all homes need repairs. ALL of them – even new ones. A rule of thumb is to calculate 3% of your home’s value and set that aside just for maintenance. NOT hot tub installation. 

Maintenance – like fixing leaks, repairs to siding, upgrading electrical panels (guys, it’s been a crazy March for us for home repair bills…I will tell you all about the insanity once I stop crying in my Cheerios). Anyway, point being, having that buffer set aside and built into our budget has saved our butts more than once. And bigger homes, by definition, cost more and so that is something we’d need to consider.

Watch those rates!

It’s no surprise that we’ve been living in an environment of extremely low interest rates. It can’t last forever, guys. So even when we refinance this home (OR if we do decide to sell and move), we will have to be aware of the interest rate environment. That 32% gross housing cost and 3% maintenance fund will fluctuate if our mortgage rate doubles or even triples. In the next four years, we will also be looking at huge daycare costs for LB. These are all factors to consider.

One thing I like about the credit union (versus a traditional ‘big bank’) is they really deal with each individual on a personal level and the transaction is maintained locally, so having these conversations is much easier and less stressful. They understand what’s going into our decisions because they live where we do! Oddly enough, I just read Magnolia Story, and it seems dear Chip and JoJo employed the same tactic in their early days dealing with bank loans.

When I really think about it, we’ve had to learn to live in the sweet spot where possibility meets responsibility. I get that it doesn’t sound as fun (and nowhere on our street is there a giant poster of our house BEFORE being wheeled away to reveal the after) – but it has been an experience that has strengthened our marriage, our finances and really set us up to build a strong future for us and LB.

I’m really on the fence about leaving this house. For now, we are going to look forward to the warmer weather, spring flowers and the sea breeze and just see what happens 🙂



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This post is part of an ongoing series sponsored by Atlantic Credit Unions. We partner with brands and companies to bring more value to you and to help us keep our blog going! As always, all opinions are our own and you can see our full privacy and disclosure policy here. 

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