Covid-19 Plan C: Buy a House

My initial plan for this summer was to spend a week in Japan, followed by a couple of months in Thailand, then coming home in September by way of Hong Kong and London. That would have made an around the world trip. Due to the travel restrictions caused by the global pandemic, all of those plans had to be scrapped.

My plan B was to hike the Appalachian Trail instead. I’ve hiked the AT all the way to the Massachusetts/Vermont border. Both MA and VT are currently requiring out of state visitors to quarantine for 14 days. That requirement makes hiking the AT a no go for me. Perhaps those restrictions will be lifted later this year, but for now continuing my section hike of the AT isn’t an option.

This left me with plan C, which is buying a house with my mom. We were going to look into buying a house together when I returned from my overseas trip. Since that trip didn’t happen we went ahead with the house buying plan.

We should be closing on the new home this Thursday. My mom’s house already sold a couple of weeks ago leaving us homeless until we close on the new house. We’ve been staying at my aunt’s house since it didn’t make sense to rent a place for such a short term and we didn’t want to actually be homeless. Hopefully, everything will go smoothly and we can finish moving on Friday. It will be nice to be in a permanent home again.

The house is a small upgrade from my mom’s previous house. She sold her old house for $135,000 and we’re buying the new house for $170,000. Where I live $170k can buy a pretty nice house. The new house is also in a much nicer neighborhood so it should appreciate faster than the old house.

The proceeds from the sale of the old house are being used as a down payment on the new house and we’re taking out a $50,000 mortgage for the rest. I’ll be responsible for paying the mortgage, which will be about $350 a month since we got a 15-year mortgage and won’t have escrow. That’s a good deal since it is cheaper than rent. I’ll also be getting 50% equity in the new house. I’m basically getting my inheritance early. The equity in the new house minus the mortgage liability will result in about a $35,000 increase in my net worth. That isn’t money I can spend today, but someday it will be a nice nest egg.

My mom is wanting to pay off the mortgage quickly. I’m thinking we should be able to pay it off in 7 or 8 years, if not sooner. By the time mortgage is paid, I’ll hopefully be ready to retire. Not having a house payment would make it much easier to retire. A lot can change in 7 or 8 years so we will see what happens.

I’ll write another post once the house purchase and move-in has been completed.

4 thoughts on “Covid-19 Plan C: Buy a House”

  1. Wow, congratulations! I guess that once the travel restrictions are lifted, you can travel without worrying about where you will live when you come back. That will be nice.

  2. I’m really excited for you Andy. Sounds like a great plan to have free housing when you retire. Plus you are helping your mom in the process.

    • Yes, it helps both of us. It will be cheap housing even while I’m making the mortgage payments. Once the mortgage is paid off and I’m only paying taxes and insurance it will be even cheaper.


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