Continued from here.

That weekend, I began the daunting task of diving into some of the material my professor friend had sent to me. I picked up the Builder’s Guide for Cold Climates only because it looked very professional and had a lot of drawings. Boy, was that over my head.

I guess I should have had a clue with the words Builder and Guide included in the title. I’m not a builder. I mean, I’ve got enough tools and know-how to put together a particle-furniture that comes from the store complete with instructions, but anything beyond that is, well, beyond me. The book itself was well-written and quite explanatory, it just had a different audience in mind.

Before giving up on page 100 or so, I did sort of enjoy trying to figure out what they were talking about. Each chapter concerned itself with a different part of the homebuilding process; the foundation, insulation, electrical, plumbing, etc. All of it was geared towards building an extremely energy efficient, durable house in a cold weather environment. I got the most out of the first part of the each chapter where they gave an overview of what they were about to address. The rest was simply graphical variations on a theme. Unfortunately, the diagrams far outweighed the informative text. It wasn’t uncommon to find references to Figure 5.62 in a ten-paragraph chapter!

The sheer number of diagrams made it abundantly clear that many, many things need to be considered in order to properly build a home in our environment. As a prospective buyer, considering having my own home built, I worried that there was too much information. When it’s time to lay hundreds of thousands of dollars down, how can you trust your general contractor to make sure that all these little details are followed?

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Continued from here…

$300,000. That’s the amount that Alaska Pacific Bank was willing to sign over to us at the drop of a hat. During the AHFC homeowner’s class, we were told a simple formula to guesstimate how high our mortgage could reach and our combined incomes topped it out at only $210,000. You can imagine the shock we had when we realized how wrong we were.

We spent that Friday evening going over the large amounts of practically incomprehensible paperwork. The $300,000 loan would be good at 5.5% interest, only 5% down, and the closing costs would be about $10,000. It would have stretched our finances to the limit, but conceivably, we could have taken that loan out on Monday!

The part that gave me the most pause, though, was the schedule of payments. The magnitude of a 30-year loan doesn’t quite sink in until you see the date of the final payment: April 1st, 2036. 2036! I’m picturing the end of fossil fuels, world-changing contact with extra-terrestrials, or at the very least, flying cars! Are we really ready for such a protracted commitment?

We had plenty of time over the weekend to reevaluate our financial lives. Could we afford a waterfront, sunlit house? Would it be possible to build our own home? Should we even consider pushing our limit, or should we look into something we could pay off in a lot more time?

We also started to talk more seriously with other homeowners, and of course, the suggestions started to come in fast and furious. Spend your limit on waterfront – it’s an investment! Get a place with an apartment so that you can rent it out and let someone else pay most of your mortgage! Spend as little as possible so that you have some remaining cash flow for emergencies!

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Back in 2002 there was a fire that managed to wipe out everything I had in storage. That was a horrible experience that I wouldn’t wish on anyway, but there was a silver lining – the insurance check pulled me all the way out of eight years of accumulated college and credit card debt.

Oksana and I married a few months later, but it took us quite awhile before we got her INS paperwork sorted out. Eventually, she received her temporary green card and (coincidentally on the same day) was offered a decent-paying job. The intervening six months, where I was the only one working, weren’t that bad. I’d trade having a single-income family over a pile of minimum interest payments any day.

Very quickly the benefits of a dual-income, debt-free, children-absent family were realized. Around our first anniversary in August, after Oksana and I had figured out how to manage our money with (seriously) five bank accounts, we sat down to talk about creating a savings goal for the end of the year. $5,000 seemed attainable.

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