My story begins in 2001. I had just been hired by my current employer. We had been living in a mobile home park nestled in the city for eight years and we were ready to find a real home so I began to look at houses and compare mortgage rates because things had gone downhill in our neighborhood. When we first moved in, it was a quiet neighborhood and the monthly lot rental was low. The park was sold shortly after we moved into the park, and things started to change. Especially the lot rent. The woman I purchased our home from told me during the decade she’d lived there it went up every 3-4 years, and then only by $3 to $5 a month. The new owner had different ideas – he raised the rent by $50 per month as soon as he could, and then every single year after that raised it by $25 to $50 per month. The last two years we were there the lot rent went from $246 to $297.
At that time, my gross pay was $2040. My take home pay was $903.10 twice a month.
I’d volunteered for my employer for an entire year prior to being hired so I felt secure in my employment and soon we started thinking about moving out of the mobile home park.
I’d always had a dream of getting my mobile home paid off, then buying a piece of land somewhere and move the mobile home. So we looked into that first, but we soon discovered that thirty year old single wide mobile homes wired with aluminum are not permitted to move to any piece of land.
Back in 1986, when Mr. A and I were first married, we followed two standard rules of thumb to buy our home.
- Never pay more than one week’s salary
- For every $10,000 worth of mortgage, expect to pay $100.
My gross being $2040 meant one week’s worth of pay was $508.00, which told us we could afford $50,000 worth of home.
We started looking around in Phoenix, and the least expensive home we could find, in the least dangerous neighborhood which we were willing to move into was a fixer-upper on sale for just over $100,000. Right there I knew we couldn’t afford it, but we went to have a look anyway. What a mess! The biggest problem was the kitchen had been moved from its original place to a built on room, and the roof had terrible leaks so the entire kitchen would need to be bulldozed. The swimming pool had a huge sinkhole next to it, which we were told meant it needed extensive repairs.
We were able to find a tiny one bedroom home near one of the worst parts of town in our price range, so we started looking at our other options.
Next we checked out buying a new manufactured home. The salesman tried his best to get us to sign on the dotted line. When I told him we couldn’t afford an $80,000 mortgage, he started talking about points and buy downs and using other terms foreign to Mr. A and I. All I knew was $80K was too much, and told him so. I told him what about $100 per $10,000 and he assured me the payment wouldn’t be over $500 a month. That might have been possible, but that would have only been the principal, and wouldn’t have included the taxes and insurance.
We obviously couldn’t afford to live in the city, so we started looking in rural areas that weren’t too far away. After all, gas was only $1.39 a gallon back in 2001. We started with one realtor and she wasn’t showing us anything we wanted to see, so we tried another guy a couple of weeks later.
He dealt in selling mostly foreclosed homes, and we went around to about six places in the same day. When we saw the place we now call home, we knew it was the one for us. 3.5 acres of fenced land to call our own! The home was an 8 year old manufactured home, a Cavco, said to be top of the line in manufactured homes. Three bedrooms instead of two, two bathrooms instead of one! The seller was asking $55,000 or best offer. We offered $53,000 and asked them to buy us a new refrigerator, and they went for it!
I’m sure you are hearing about the financial trouble the United States is in. Part of the problem can be directly traced to lenders and buyers not following the two rules of thumb mentioned above. Thankfully we did not allow ourselves to be charmed with the soothing promises of the salesman at the manufactured homes site.
So, the morale of the story is 1) Follow the two rules of thumb, 2) Don’t let your heart lead the way when it comes to buying a home – make sure you can afford it before you take the leap.
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