Thursday, July 27, 2006
I just got back from my meeting with a mortgage broker, and the news was mixed (which is exactly what I expected). Basically, with my assets, and credit score, I was only eligable for a $270,00 loan (which won't buy much in this area), but with a little work I could make myself into a much more attractive Lendee for the banks. He outlined 4 steps which would put me in a good position a year from now.
1. Pay off your back taxes
2. Clean up the student loan listings on my credit report
3. either pay down my (small) credit card or get a bigger limit, in order to reduce my balance to under 50% of the limit.
4. Get another, larger credit card.
Yes, I know this stuff is obvious, but talking to a professional who could also prioritize what steps to take made all the difference in the world.
The other good information I picked up was the 'ballpark' figures I would dealing with on a loan for $480,000 (which is right about what we are looking at for a quasi-decent 3 bedroom in Santa Rosa). One thing that has had me flummoxed was the online mortgage calculators that talk about $3300 monthy payments on a loan about that size. I simply can't afford that kind of money. But, he pointed out, you can write off a large portion of those payments (which I knew), and what you should do is talk to a tax accountant and have them revise your W4 to take that into account. Then end result is that instead of getting a fat check from the IRS at the end of the year, you break even, but your take home pay is much bigger throughout the year.
He said that a $3300 mortgage payment (once the W4 has been adjusted) is akin to a $2300 rent payment (note, my figures are even more ballpark than his, because I don't have my notes in front of me, but you get the idea). Now I *could* afford a $2300 rent payment so it does look like it will be possible, at some point, to buy a house. Phew! Waiting may be good as house prices are likely to come down a little more over the next few months. I just hope I will be in a good position to buy before prices and interest rates rise again.
Now comes the hard work: Saving (you've got to squeeze every penny!), paying off debt, and being patient.
PS. Given that it will be awhile before we're ready, I suppose I can divulge which house we are currently in love with as it will be sold long before we are ready to buy. I think it's a great, great buy. It's certainly the nicest thing we've seen anywhere near the price. The bad news? It'll need a new roof within the next 5-10 years.
This weeks House we'd buy if we could
Clark Rosen, Realtor: http://www.clarkrosen.com/
Brent Blaustein, Mortgage Broker: http://loans.princetoncap.com/brentblaustein/
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Friday, July 21, 2006
And the transformation happened so quickly. Just two Sunday afternoons driving around looking for open houses. Sigh.
Yesterday we rose to the next level. I spoke to a realtor. Clark Rosen. He's my friend's dad, and in one conversation I knew he was the guy I'd like to work with. Not even to mention the past history we share, and the general 'good, honest, stand up guy' qualities I know he has in spades, but his friendly, knowledgable, cheerful demenor. I never felt like he was applying to be my realtor (which was a first from all the other realtors I've met over the past two Sundays).
Today we actually made an appointment to see a house. Luckily it was not *the one*. It was one of the first three bedrooms in our price range that wasn't a condo. On the other hand it was a bit too much of a fixer upper. It had all the classic styling faux pas. Astroturf on the front steps, wood paneling, and that lovely 70's two-layer shag carpet. The yard was red lava rock in the front, and dead and sunbaked in the back. It had originally been a 1920's cute bungalow with a full width porch, but the late 60's remodel had undone most of the great details you normally find in such a place. In order to update it to something I'd like to come home to would require a complete, stem-to-stern interior remodeling.
And all that for only $500,000. Ah Bay Area real estate.
Now the realtor who was showing us the 'diamond in the rough' knew of another house being sold by it's owner nearby that was the same price but was 'ready to go' in his words. And, almost unbelievably, he was exactly right. It was perfect. 3 bedrooms, hard wood floors (freshly refinished!), new paint all around (good colors), nice, if unedible landscaping, fire place, great kitchen with a classic wedgewood stove, garage with painted/sealed concrete floors, the list goes on and on. Meredith was practically beside herself with house-desire. If we had been in a position to make an offer she would've signed any paper necessary. It would've been a done deal.
By the time we get our collective financial house in order, I'm willing to bet that this particular gem will be gone. Anybody who's looking in that price range will immediately see what a good buy this place is. Which, in true house-buying-twit fasion, is why I won't tell anybody where it is.
Just in case.
Sunday, July 16, 2006
The thing of it is, that I know very little about buying a house, other than there's a lot to know.
Many of my friends now own houses (even Chairmen Ben!) and their advice is all over the map, from "if I'd known how easy it was, I would've bought much sooner" to "it's the most nerve-wracking thing ever."
Now there are some hurdles to get over, not limited to house prices in the North Bay, to my credit not being as stellar as I could hope. But I think it's possible, and with the market cooling down a bit, probably a good time to start looking.
Of course the problem with looking is finding something that you love before you are in a position to buy. Like this one. But that's bound to happen.
Ideally we'd like to find a house in our current neighborhood (cheap and cheerful!) with a decent sized lot. But frankly almost anything with a decent roof and a good foundation and garden potential will have our interest.
I keep dreaming of landscaping and a garage with a concrete floor (something I've not had the pleasure of since I was 18). The house in the above link, already has us envisioning how we'd remodel it, and what we'd do with the yard. But that's putting the cart before the horse.
In reality I'd like to buy into something in the next two years. That would give me some time to clean up my credit, get together some semblence of a down payment and school myself on all the ins and outs of real estate.
Friday, July 14, 2006
And as my life is increasingly involved on-line (calendars, to-do lists, reference materials, shopping, etc) I've started doing some serious thinking about how vulnerable much of that data is. Granted, with most things I have little control over 'my' data held in banking computers, or goverment laptops (SSU comprimised thousands of it's students SSNs last year), I do have some control over some things. My email is one of them, and it's probably the least secure method of communication I have. Encryption is a toddle, and on a philisophical level I feel it's critical that everyone becomes aware of the issue, and starts using encryption.
It's not that I feel that my forwarded funny cat videos from youtube are critical to keep secret, and I'm smarter than to put anything important like SSNs or credit card numbers in an email, but with my email unsecure, there is no way to be sure that email you recieve from is actually from me. It doesn't take much to 'spoof' someones email account, and then the cracker is able to siphon all my emails without my knowledge. So the easy thing to do is encrypt my mail (and thus move away from gmail).
Encrypting email is really quite easy (especially after you set it up). I use a combination of free tools on my mac that integrates nicely into Apple's default Mail app. It's the open-source variant of PGP, called GnuPG. It's a very good, respected, encryption scheme that relies on "public-key cryptography."
Here's how it works: I make two different keys, one public, and one private. I put the public one where anyone can get it, and keep the private one...well..private. Then if you want to send me a message you use my public key and encrypt the message. When I get it, I can decrypt it with my private key.
Think of it like your voicemail: your phone number is your public key. I can leave you a message using your phone number (public key). When you call in to your voicemail system, you enter a number that allows you to hear your messages (the private key). I can't hear your messages, but anyone can leave one.
Got it? If not, let me know or google PGP, or public-key encryption. There's volumes on the 'net about it.
These encryption tools also allow you to encrypt files on your hard-drive (or your whole hard-drive!) and 'watermark' any message so that anyone who receives your message can verify it really came from you.
So, any message you recieve from me should start containing something that looks like:
-----BEGIN PGP SIGNED MESSAGE-----
The message would be in here.
-----BEGIN PGP SIGNATURE-----
Version: GnuPG v1.4.4 (Darwin)
-----END PGP SIGNATURE-----
If you install GnuPG (or PGP), and download my public key, it will instantly verify if that message really came from me, and then if you reply you can use the same key to encrypt it to me.
Really this stuff is easier to setup than a home network, and it's a basic precaution all of us who use email should take.
As an aside: All the 'data losses' that keep showing up in the news (laptops with 65,000 SSNs, or credit card numbers, etc.) wouldn't be nearly so catastrophic if these people used some decent form of encryption. Frankly I'm surprised no one has sued these various companies/agencies into mandating encryption.
*There is some version of GnuPG/PGP for every OS and almost every mail client out there. If you want some help setting one up, let me know I'd be happy to help.
Monday, July 10, 2006
And that's only the coffee shop. Along the walk I pass by a large building that used to be a lumber yard (and it's many fond memories of Saturday morning visits with my dad). Now it houses a bike builder I've known for years, a kayak shop with a pair of blue heelers that I've played with on several occasions, and a textile company that several friends have worked at over the years.
I walk by the spot I spent countless hours studying while in college, the space that until recently was my regular cafe, which was run by a friend from high school and staffed by my doppelganger.
And this all takes place in a neighborhood I spent many hours in as a teenager taking pictures of decrepit warehouses.
During my early to mid twenties I felt stifled by all those associations, but I've settled in, begun to enjoy them. They are what connect me to the world, they add depth to my landscape. I think that's why I don't enjoy traveling as much as I feel I should. Don't get me wrong, I love seeing new things, and visiting new places, but without any connections, I grow bored really fast.
I am a townie.
Ironically, I don't even live here anymore.
Friday, July 07, 2006
20,000 in 8 months. In that time I've commuted to Oakland, driving over the sierra (2 or 3 times), through flooded areas in Sonoma County during our wet wet spring, almost the entire length of California (from Trinidad to Mammoth lakes, admittedly not in the same trip) and daily errands in stop and go traffic. So far my mileage has stayed at 22 mpg almost without change that entire time (one dip to 19, and several tanks at 24 or so).
High Points of ownership: The car has got to be the absolute best vehicle I've driving in nasty weather. Torrential rain on the freeway? No drama. Snowy icy roads? Surefooted and predictable. It's comfortable and bland (e.g. no tickets! unlike my BMW 2002 which was a cop magnet). As a wagon it can hold an impressive amount of stuff. It's handling is better than any other car I test drove (except for the Prelude). The cappuchino cup holder in dash.
Low Points: Brake rotors have gotten horribly 'warped.' Rear windows only roll down halfway. The interior fake-wood dashboard is still ugly. One of the oxygen sensors has crapped out. The rear license plate *still* rattles. The windows are 'frameless' and have gotten noticblely loose in the door when they are rolled down. Wind noise on the freeway is suprisingly loud. I've read that it's fixable by doing something with the window guides, but I haven't taken that on yet. It can be hard to find in the parking lot. There are so damn many of them.