Feb 25, 2020: Another one of those days


Originally published/last updated on myearlyretirementjourney.com on 25Feb2020.

Today was one of those days.
Got a $5.5k medical bill from 2018.
Womp, womp. All I saw was my Roth IRA for the year.
Had to go back to my FIRE Tracker. I guess everything is going to be okay.

With The Thing that happened; moving; buying a house, and now this, I’m curious how it all pans out financially.
It was a day of bad feelings yesterday.
Some stayed into the next day.
I need a massage.
A vacation.
This adult stuff is hard. Caring for other people is hard.
I feel like I’m back in a foggy daze.
I’ve run out of things to hope for.
I just can’t seem to reach an equilibrium.
Work is a low level annoyance that is amplified when other things in my life become stressors.
I am officially stressed. I generally hesitate to use that word, but I feel stressed. I just feel like each of the actions I need to complete involves someone else and interaction with other people is like a minefield for me.
On my mind:
– Disputing/paying medical bill
Current thoughts on that: default is prob try to spread the payments out over 2 years if they’ll let me. 2k a year does not seem as derailing as a $5k lump sum since there is some semblance of a $2k cushion in my budget.
– Some payout I was expecting to maybe get some breathing room and perhaps furnish new house has already been eaten up
– Job
– Resolving financial issues for Aunty MERJ
– 2 outstanding job applications
– Possible broken family tie that I don’t want to expend energy to repair
– An uncertain future

Housing Diaries: Is my math wrong or does PMI make sense for me?


Originally published/last updated on myearlyretirementjourney.com on Feb 21, 2020.

I was awakened from sleep with worries that the PMI I willfully accepted on my mortgage loan would ruin everything. I don’t know what “everything” is exactly but the worry persisted none the less.

One thing (of few) I did know going into the home buying process was to get loan “quotes” from different lenders. I had no idea what to look for, so I asked the internet.
The internet said different things such as comparing APR, cost after 5 years, interest rate.
I did a combination of those things and focused on a 6 year time horizon. In 6 years, I hope to reach a FIRE number of $500k. See my FIRE Tracker for more information. So 6 years would be my next financial (and life) inflection point.
Does PMI make financial sense for me?  Here’s what my calculations show. 
$77k house (approx)FHA w/ PMIConventional,
no PMI
Down Payment$2,691 (3.5%)
$14,378 (20%)
Interest rate3.625%4.125%
Monthly Payment
(incl. P/I, PMI,
Insurance, taxes, HOA)
$568$470
Monthly payment x 72$40,931$33,874
Cash to close$2,698$16,646
Total Cost in 6 years$43,629$50,520
Balance in Feb 2026$66,018$54,398
Here are some assumptions and premises used in my calculations and though process:
  • Transaction is purely financial (not an investment)
  • Goal is to reduce monthly housing expenses
  • Goal is to reduce overall housing expense
  • Time horizon is 6 years
The number I used to compare all the loan estimates was the Total Cost in 6 years. This included cash to close + monthly payments over 6 years. For me the FHA loan made the most sense purely based on total cost over six years. The lender offers $4500 in closing costs for the FHA loan vs ~ $2200 for conventional loan.
It’s hard to predict anything in life. Maybe the world ends, and I have to move in 6 weeks or I totally love it and want to stay for 100 years. Anything’s possible, but I can only use the next best data points available to me. So I went with 6 years as my time horizon for comparison. And based on that, the math showed the FHA loan with its upfront PMI ($1299) AND monthly PMI ($55/mon) to be the best deal.
I couldn’t believe it either. What about building equity with a larger down payment and the fact that I’ll owe about $10k more at the end of 6 years with the FHA loan?
Here’s my reasoning. I currently live in a very desirable neighborhood where the median household income is about $100,000 (actually a bit more). Homes here tend to appreciate and sell fast. The neighborhood I’ll be moving to is almost 100 miles away where the median household income is about $50,000 (actually a bit less). I’ve been warned by more than one person not to move to this area. The crime rate is high, and it has a bad reputation. I’ve been cautioned by at least one person that my single status and ethnicity will pose an additional risk. Based on that, my presumption is the best I can hope for in 6 years (or whenever I am ready to sell) is a net sale of what I paid for the property ($77k).
Even with that, the FHA loan still proves to be the better deal. Here’s how.
I sell the house after 6 years with net proceeds after fees of: $77k
w/FHA balance of $66k: 77 – 66 = $11k credit to me
w/Conventional loan balance of $54k: 77-54 = $23k credit to me
Yay!! Conventional loan shows to be $12k more in credit to me.
But, wait…
Remember, FHA total cost of $43k – credit : 43 – 11k = $22k of costs
Conventional loan, total cost of $50k – credit: 50 – 23k = $27k of costs
So I keep $5k of my money. That’s an IRA! So to me, going into the transaction knowing the property is unlikely to appreciate significantly in value, I still win financially with the FHA loan. Even though my monthly payment is higher; I’m paying PMI twice; and I’m putting down a smaller downpayment.
It just goes against everything the PF community might say, and everything I feel like is being circulated when it comes to loans, debt, and mortgages.
What am I missing?
Related reading: My Home Buying Journey

Housing Diaries: Everything but my bowel movements or all the things I have to provide to a mortgage lender


Originally published/last updated on myearlyretirementjourney.com on Feb 20, 2020.

If you’ve ever tried to keep your personal finance from the eyes of others, getting a mortgage is not for you.


From the initial pre-approval to the conditional approval to ultimately granting the loan (hasn’t happened yet), mortgage lenders ask for so much stuff. Some of it doesn’t even make sense. Anything that has to do with how you earn money or spend money or save money, they’re going to ask.
They even wanted to know why I was looking at a property 80 miles away from my work location? So was someone plugging that into Maps somewhere? Who even noticed that?
Here is everything they’ve asked for so far:
  • Credit score
  • 2 paystubs
  • 2 years of W-2
  • 2 bank statements
Then, read and sign
* 1003 – URLA
* HUD/V.A. Addendum to Uniform Residential Loan Application
* Borrower’s Certification & Authorization
* Loan Estimate
* 2015 Settlement Service Provider List
* Home-Ownership Counseling Acknowledgement
* Homeownership Counseling Organization List
* Credit Score Disclosure
* Privacy Policy
* Social Security Administration Authorization
* Hazard Insurance Authorization, Requirements and Disclosure
* Fair Credit Reporting Act
* Equal Credit Opportunity Act Notice
* USA Patriot Act Information Disclosure
* Borrower Consent to the Use of Tax Return Information
* NC Credit Property Insurance Disclosure
* FHA Amendatory Statement and Real Estate Certification
* FHA/V.A. Notice to Applicants
* FHA For Your Protection: Get a Home Inspection
* FHA Notice to Homeowner
* FHA Informed Consumer Choice Disclosure Notice
* FHA Important Notice to Homebuyers
* NC Notice of Right to Select Attorney
* Credit Score Information Disclosure (FACT Act) – Individual
* Affiliated Business Arrangements – NC
* Appraisal Waiver
* IRS 4506T – Request for Transcript of Tax Service
* SSA-89 (to verify your identity)
Then..
  • Letter of motivation
Then…
-Copy of drivers license
-30 days most recent paystubs (yes, once you cross into the next month and you’re still in the process… you need to keep submitting)
-2019 W2 form
-Most recent bank statement (yes you’re seeing that twice, apparently this is ongoing)
Then a few days later…
  • Contact information for the homeowners insurance agent who will be writing the policy for your new home.
  • Current rent amount.
  • Sign and date a letter confirming that you will occupy this new home as your primary residence.
  • Transaction history from your bank account, dated from 1/31 to current, showing the  deposit to the builder being withdrawn. This transaction history will need to have the URL listed on each page (attached instructions).
Still to come…
  • Verbal verification of employment (dated within 10 days)
  • 2018, 2017, 2016 W2
  • Social Security Verification
  • Any income, asset, and credit documentation more than 120 days old will require an update
  • Credit monitoring until closing date
  • Fraud Guard Report
  • Receipts of Appraisal
  • Verify funds needed to close within 30 days of closing
  • Hazard Insurance
  • 5 more FHA documents
  • Please note we will verify your employment twice prior to closing: once within 30 days of closing and again 10 days prior to closing date.
I asked the internet and it has to do with the mortgage collapse from a decade ago (that I don’t fully understand).
Now mind you, my loan is for < $100k  (whereas my student loan was $300k+ and all I filled out was one form… well I’m sure there’s hidden commentary there).

Housing Diaries: How I Saved $100 on a Radon Test and other life updates


Originally published/last updated on myearlyretirementjourney.com on Feb 20, 2020.

Feb 18, 2020

You’ll have to excuse yesterday’s post. It was an incomplete draft from a week ago that I just published. I endeavored to do a life update and a housing update as separate posts but it turns out this housing stuff is taking over my life!
Life Updates
I worked from home all last week and it didn’t suck.
I’m sinking my teeth into this next stage of my life (not applying to jobs fruitlessly, leaning into “peri-retirement,” securing long-term housing).
With the 6-year house plan, other things don’t matter as much.
I’m still not sure the house is the absolute best choice, but it’s the next best choice.
More thoughts on why I decided to buy a house I’m not that excited about
Psychologically, I would suffer from mental decline every time I had to renew my lease. In a sense, the house provides more stability. Case in point, my domain name for this blog needs to be renewed. That triggered a whole new decision spiral. Do I really want to keep paying for this hobby? Followed by at least a 1 hour search on 2 separate occasions on how to transfer blog to a free site. Not to mention the thoughts before and after.
An arbitrary inflection point. That’s what my apartment lease had become except it would last for at least the 60 days before my lease was up if not more. I would question my life, my career, my life (yes, you read that twice), every choice that lead up to that moment, etc…
Financially, the house meets a desired goal to lower my all-in housing costs. Barring catastrophe, I stand to save about $300/mon (not including transaction costs). If you include transaction costs, I stand to save about $300/mon after Year 2. Over 6 years, however, the potential savings vs renting is in the thousands.
Structure, Foundation, Structure. I touched on this a little bit in the psychological benefit. This section encompasses some of the reverberations of having that psych component soothed. The house adds some structure to my day, my life, and some decisions. The apartment made my life feel in flux; the house makes my life feel grounded.
Strangely, I know people say you’re locked into a house and can easily move out of an apartment, but somehow I feel like the apartment was more of a noose. If I renewed my lease in January and had to move in February, I could potentially be stuck with the lease for the rest of the year.  A $600/mon mortgage seems a little easier to stomach vs a $1,000/mon lease. Somehow I feel more in control of the housing situation with a house. I feel like I have more options. I could leave it empty; I could rent it out; I could sell it.
I can’t emphasize how much more grounded I feel not having to worry about where to live.  I’m shocked by the impact as I write this. And the fact that if all goes well, I plan to stay for 6 years just eliminates one more variable for me.
The Radon Test
So in the hundreds upon hundreds of pages of paperwork that has passed through my inbox was a recommendation for a radon test. A lot of the recommendations are fear driven. If you don’t do this now, and something happens, you’re now responsible for all the world’s problems. The realtor quoted a $150 radon test by a professional. Since I’d never heard of radon poisoning and I was asked if I wanted one (making it seem optional), I asked the internet.
My area is not a hotzone for radon and there’s a kit you can do yourself. It literally is sitting a small plastic dish of activated charcoal in your house for 2-4 days and then mailing it back to a lab. It was at my local Lowe’s for $16.07 (you can find it cheaper).
Total cost to me: $44.32
Kit: $16.07
Fuel for 2 rdtrps to the property: $20.68 (it’s 80 miles one way)
Postage: $7.57
Savings: $105.
I’ll take it! Thanks President’s Day for that lucky day off!

Feb 11, 2020: Today was a better day

Originally published/last updated on myearlyretirementjourney.com on Feb 20, 2020. 

Just yesterday I was questioning the humans with my usual lament, why is it so hard to be a human?
Family drama x 3.
Now today, it literally feels like a thing of the past.
My emotions got the best of me, per usual. I don’t understand how perception can be so all consuming. The brain is deceptive.
Today was a better day because I got some packing done. I have a lot of stuff. I quite exquisitely underestimated how much time and energy packing up this studio is going to require. In some downtime at work last week, I remember thinking, I can knock out one-half of the space a few hours after work, and the other half the next day.
Bah! What a silly, silly woman I was.
Time is an issue, but more so desire and energy. I look at it and it’s defeating. It’s not even the labor, but the need to do a good job vs just stuffing everything in a box or garbage bag and dealing with it on the other side.
That’s probably going to be my MO. If I haven’t sorted it by now, it’s going in a garbage bag or box. On my shopping list for this week are some sturdy black garbage bags.
Some lingering regrets about the house hunt.
Two years ago, this same builder built some townhomes in the area where I went to college. Because I was familiar with the area, it seemed like the right move. But because I wasn’t convinced North Carolina was where I wanted to be; other people close by were giving up their homes; and the fallacy of a house always being an investment, I renewed me lease.
Now I wish I were there instead of here.

Feb 9, 2020: I’m having trouble believing your lies, I mean words

Originally published/last updated on myearlyretirementjourney.com on Feb 9, 2020. 

So the thing happened. I don’t want to write it because I’ll start crying. There goes my one 2020 goal of: not crying.
The thing happened, and it means a family gathering.
Everything is annoying.
Closer to family
New cousins I just met in Florida are vocalizing that I should move to Florida. I know from experience that these types of statements are incongruous with reality. To me it’s like another version of “see you later.”
Same with an aunt in Maryland. I want you to be closer to me, she says.
The reason this bugs me is because I know it’s not true and I wish they would stop saying it. It’s another opportunity when I don’t get to speak up for myself when something is clearly annoying because in keeping the peace, we are supposed to not sweat the small stuff and let things go.
The reason I even consider it is that I’m stuck on this perpetual crossroads of what to do next, so when people pipe up with their you should move here, I can’t help but consider it.
But in reality, here’s what I really think.
Sure I’ll move to X place, if all the following conditions are met (by the requestor):
1) You apply, pay for, study, and pass the law exam for that state so I can be licensed to practice. Although I don’t use my license now, I sleep better at night, knowing I could rely on it for a job if needed.
2) You find and pay for some continuing education credits, 15 a year, or whatever the requirements are to maintain reciprocity for your state.
3) Find me a brand new apartment for $650 (max $800/mon) all-in housing costs.
4) Come, pack, clean my apartment, and haul my stuff to your state.
5) Clean the new apartment; unload, and sort my apartment and new utilities. Find my local grocery store.
6) Arrange for my car to arrive at my new destination.
7) Oh yeah find me a comparable job, with similar or less workload for similar or more pay.
If all those conditions are met, then sure! I’ll move to be closer to you.
Ultimately, my thought process starts there, and ends with if this was the right move for me, would it really be a dilemma. Would I have to “work through” it. Would I have to convince myself, and I believe the answer is No.
I’m easily seduced by ALL the bloggers’ need to be closer to family and family values…blah, blah, blah… so it makes me think this is the thing I should want. But luckily, it’s so difficult to actually implement on my part that its realization is unlikely.
Life update – regrets
Some regrets from this week – I gave my brother my SSN to update his beneficiary designation. He is notoriously irresponsible with money. NOTORIOUSLY. He has borrowed $500 from me when I was still in my late teens and thought he didn’t need to pay it back because he lost his job. He borrowed my car, left a can of soda in it and it exploded and thought he didn’t need to be responsible for cleaning it up because it was an accident. He also lost the key to this car and has never funded its replacement. He has listed me down as a contact person for some financial trouble he got in and I got a few calls when they were looking for him.
He had asked for my information before, and I had not provided it. But in a moment of weakness, because I was updating my beneficiary information (after some recent life events), I just gave it to him.
Then I remembered- the anxiety I feel now is not worth any amount of money he would leave me, namely because he will probably outlive me, and he will likely have no money to leave me as I mentioned he is NOTORIOUSLY irresponsible with money. This was my original rationale, but I guess I was feeling reckless.
I so regret this. So, so, so regret this. Has anyone ever been involved in someone else’s negative financial outcomes and had to pay the price?
My most salient fear is that he will fraudulently use my SSN to open a line of credit that I will then be responsible for. And my financial life was finally going so well. The only thing that takes 1% of the fear away is that I get alerts when things hit my credit report, but even those have been up to 120 days late. And at the point where he’s already done the thing, what recourse do I have?
A liar is born
I think I’m going to have to lie to my family. I mentioned the thing happened. And family are on a call this afternoon to make plans. I didn’t know the conference call was happening until a few minutes ago, but even If I had more notice, I still don’t want to be a part of it. Mob mentality. Talking over me. It’s better if I’m not there, but if I’m asked, I’m giving myself full permission to just lie. (Hypocrite, much?)
Life update – working from home (WFH) and peri-retirement
I’m working from home tomorrow. In a moment of extreme emotion at 2a, I just didn’t want to go back to the office and sit next to that coworker. So I got online and ordered internet.
I rationalized that the $20/mon more I thought it was going to cost to have secured home internet (to WFH) vs commuting was worth it. As luck would have it, I was able to get internet for about $20/mon vs the $65/mon I thought it was going to be, so if it works out, it’ll actually be cheaper to WFH than commute ($44/mon in gas).
Undeclaredly, I’ve sort of sauntered into this peri-early-retirement. I don’t even want to call it early anymore because it’s this thing that’s coming; and it was always the age where you had enough money to not work anymore. And peri-early seems redundant. So to revise, I’ve wandered into this peri-retirement, where I’ve purposed my (discretionary for now) funds to make my life easier and convenient. That’s always kind of been my MO at least for some things (like feeding myself), but I feel myself leaning into this MO more as of late and in different aspects of my life.