You guys. Just when I thought I had this finance stuff on lockdown (wait, did I ever think that?), the universe went and threw a monkey wrench into my plans!
Last summer, as you of course recall, I bought a condo. It’s now my home with Brent and Stanley, and I love it.
I mean, it could have a bit more storage so I don’t have to get mean and donate the fourth suitcase. And sure, it could be near a less busy street. But it’s great. Perfect for now. Affordable, even. Only wait. It’s not that last thing anymore.
Fact: Mortgages Can Increase Even With a Fixed Rate
Fast forward to January. I logged into Mint, and noticed holy smokes my mortgage payment went up by 50%. I panicked, and immediately called my loan provider. The woman on the phone was really nice, and helpful, but told me that because taxes went up, they had to borrow from escrow (fun fact: escrow is a tiny bank account within your mortgage company that is supposed to cover stuff like this!) so not only am I paying more mortgage, but I’m also paying myself back so I don’t have to go through this again next year.
Thank goodness Brent’s living with me, because right now? My mortgage + HOA (which went up, too!) is about 75% of my take-home pay.
Why did everything increase so dramatically?
My knee-jerk (heavy emphasis on jerk) reaction is because Oregon doesn’t have a sales tax.
But the truth is, my property taxes were triple what the estimate was when I bought the condo.
See, because Oregon doesn’t have a sales tax, we have an underfunded state. So, every time the schools need some books, or the roads need to be de-crack-ified, they pay for it through property taxes.
My condo building was built in 2011, which was the last time the property was assessed for taxes.
And the assessed value of my 900 square foot condo made my property taxes nearly $4000.
30-Year Fixed Only Means the Interest is Fixed
Sure, I have a great rate on the condo, and sure, between Brent and I, we can still afford to live here, but with how much we’re paying each month, we should either have a doorman named George who signs for our packages or a backyard with a fence.
We have neither.
The taxes made the insurance on the common areas jump too, which is why the HOA fees went up about 75%.
The glory of homeownership is starting to fade, and it’s driving me crazy.
I complained to my friend (who was my realtor, but I can’t define her as such forever because how many homes am I really going to buy?) Andi about this. “How did this not come up?” I whined. “How does a single person living on a moderate income keep their home when their mortgage jumps this much in less than seven months?”
It’s clearly not Andi’s fault (though it would be kind of fun to blame her). But I can easily see how people end up losing their homes.
Property tax plus state income tax = about 15% of my salary.
It sounds to me like I’m getting priced right out of this market.
It’s making me dream of places to live. Places that don’t have a state income tax. Places that have a low cost of living. Places where a forever home costs less than a Portland condo. I’m happy that we can afford it, but not happy that we’re paying more into what’s starting to seem like a money pit.
Have you been hit by completely unexpected expenses?