Being a Homeowner is not always easy

 

Dear Bloggers,

 

We have lived in our house for almost five years and my wife wants to move back to the little village on the lake were we once started as homeowners. The lack of houses is making the market going wild and it got overheated. Although homeowners that want to sell have to bring their prices down as the energy market has become impossible for many Dutch families. Something to consider for the coming years. So we need to hold our horses for a while until they realize that we are not going to buy that far over budget.

new and old situation

How to budget for a new home so You don’t end up house poor.

Before buying a home, figure out how much house you can truly afford, including a budget for maintenance and repairs.

I have discovered that I was house poor soon after we bought this house in 2018.

When I put 10% down on the 300 -square-meters property with a  111-square-meters house in the city of Sneek, Friesland in the Netherlands, a district on the outside of Sneek, I was surprised to find out what we had to pay, which initially was €162.000 on mortgage.

Above the new situation as the hedge was a fire hazard and the garden was fully out of shape.

Heating the poorly insulated home was also more expensive than we thought it would be. To make ends meet, the budget had to be extended as 52-year-old  we had to take out a home equity line of credit.

“I quickly found that I was spending at least half of my small €46,000 income at the time on being a homeowner,” I never tried this before. “It turned into the home owning me, as opposed to me owning the home.”

While buying a home can be a sound investment, it can also become a financial burden. Here’s how to think about your housing budget so that doesn’t happen to you.

Bovenkant formulier

Getting ready to buy a home? Hire a financial advisor that does all the math for you and sees into the fact that there might be extra costs on remodeling the house. Constructional things can cost a lot of money.

Total renovated the entrance hall and the staircase has been replaced

Onderkant formulier

What does it mean to be house poor?

Someone who is house poor spends so much of their income on homeownership — such as monthly mortgage payments, property taxes, insurance and maintenance — that there’s very little left in the budget for other important expenses.

Being house poor can limit your ability to build up retirement or other savings, pay off debt, travel or enjoy life. Yes been there, done that and got the T shirt.

“I did not have the money for going out with my friends anymore, going to restaurants, or enjoying time as a 50-something-year-old.” It was an extreme time to survive “I was selling all kinds of stuff on Marktplaats, trying to make the heating bill payment.

A total rebuild of the kitchen required a new electrical system due to induction cooking

In fact, 28% of recent home buyers say making their monthly mortgage payments will be among their biggest money stressors for the next two years.

Budget before you buy

Before shopping for a home, it’s important to figure out how much house you can comfortably afford, which may be a different number from the maximum mortgage you can get approved for.

“A reconstruction calculator is definitely a good starting point for helping to determine your housing budget,” says Gerrit who is a certified financial planner. “However, they also require that you have a strong understanding of your cash flow today — what income is coming in, what expenses are going out and what amount you are saving.”

On the top picture you see the new electric system on the lower picture the old one

One rule of thumb is that you shouldn’t spend more than 28% of your gross monthly income on housing-related costs and 36% on total debts, including your mortgage, credit cards and other loans. This is 64% in total

everyone’s situation is different, and the rule doesn’t take into account the need to leave room in your budget for things like furniture, as well as maintenance and repairs. Plan for upkeep and upgrades

The cost of unexpected home repairs and ongoing maintenance can take you, in particular, by surprise. Even a house that was in very good condition on closing day will inevitably need some big-ticket fixes over the years.

I realized just after moving into this new home that the roof had a leak and the draining system needed some work. So I got a roofer over to fix the problem and this took about €4000 out of my budget for remodeling.

The old living room 

41% of people who have purchased a home in the past 12 months say their biggest money worries in the coming two years will be affording home repairs and maintenance.

The new living room

Saving 1% of the property’s value is a good starting point for maintenance expenses per year.

But, you may need to scale up to 2% of the property’s value based on the age and condition of your home, ours is from 1966, repairs you have already made, and the life expectancy of housing components like the roof or furnace.

Bovenkant formulier

Onderkant formulier

Tips to avoid being house poor

Even if you plan properly for a home, it’s possible to become house poor if a job loss or medical emergency leaves you unable to pay your bills.

Painting the outside of the house

In 2018, when we decided to purchase a home with my wife, I knew we wanted to do things differently. I Thought that we as a couple bought our “dream house” after living so frugally for nine years that we could pay off our debts and save up a 20% down payment. Even so, we took out a smaller mortgage than we could have qualified for. After two years of renovating our house to a home again we ended up in extra costs of about €100.000 We took the electrical wiring down and rewired most of the house. All the draining was renewed and also the water and gas lines. We took the wooden floor out as it was rotten and got a  foam concrete floor with underfloor heating a total new heater with new high efficiency radiator panels upstairs, we placed insulation between the floors and still there is some work left to do in the coming years.

Soon on our house you might see a sign like this

“When you're absolutely sure you want to live somewhere for the long term, buying a home with the proper down payment and an understanding of the true costs of homeownership can be a great experience,” I am having a bit of experience through the years. “I found that with my third round of homeownership.” And we are getting ready to take step four.

 

Someday, sometime and somehow the new adventure will start soon I hope

 

The Old Sailor,

 

You have Osteoarthritis and now what?

 

Dear Bloggers,

A few years back in the summer I first felt it: some painful morning stiffness in my fingers. The first signs of osteoarthritis. I resemble my father in many ways. We both went gray when we were 25. He developed osteoarthritis in his fingers around the age of 50 and had deformed, painful fingers and hands 20 years later. Other joints also gave pain complaints over the years. I am a bus driver now and would like to keep doing this until my last day. So, no arthritis for me.

You have to learn to live with osteoarthritis, GPs say and 15 years ago I went to the hospital and the Rheumatologist said it must be Fibromyalgia as there is nothing to find in your blood and you are still young. To keep performing in my job at sea. I had to try things out. They gave me a device that gave electric shocks to ease the pain. After a while it didn’t work out. So, I was getting pain medication and through the years I was on the highest possible dose. This summer the pain was getting back to me, and I became ill of it.

I went to my doctor about it. I thought I knew what he'll say: "There's little you can do about it, just learn to live with it." I have heard from many people around me that this is the message they came home with. Or I'm on the doorstep with drugs that won't address the cause. On sites such as the rheumatoid arthritis fund, osteoarthritis is referred to as “this chronic disease” and the treatment consists of drugs such as painkillers and anti-inflammatories, which the doctors have to prescribe for you according to their protocol. To my surprise, I was immediately referred to the Rheumatologist Dr Baudoin in Lelystad. This doctor is not in favor of numbing people with painkillers and other drugs. This is better than just getting a diagnosis in which you are immediately labeled as a "patient" and the "cure" turns out to be an expensive medical treatment that is not yet available. I don't enjoy these kinds of things. First thing I had to do he said was stopping the painkillers and go back to Panadol and solve the hardest moments. My body was totally in distress as it needed to go back to work again. I have been sick of it for three weeks getting fever and diarrhea and as my immune system was totally on the floor. Surprise surprise I ended up with a pneumonia. Isn’t life wonderful.

No one is responsible for my body. That's just me. I have the task of taking care of this as best as possible and that starts with informing myself well. Fortunately, we live in a time when you can keep yourself well informed. I started researching osteoarthritis and what I could do myself to ensure that I can still do my favorite job somewhat decently at 65. Then what I read made me happy and I want to share this with you.

Osteoarthritis is a disease of joints. These can be fingers, but also knees, elbows or hips. It is a form of inflammation that usually ends in wear and tear. It is therefore important to be there early before the wear occurs. This usually only happens after the age of 40, but it is very common. Women are ten times more likely to develop osteoarthritis than men. Wear and tear occurs in the cartilage of the joints, making the cartilage less elastic. The bone outgrowths, together with muscles and tendons, compensate for this reduced function of the cartilage. This is what causes stiffness at first and pain later. Overloading the joint (sports) can also lead to (extra) wear and tear.

Osteoarthritis says something about your overall health

Osteoarthritis seems to be a local condition, but it says something about the health of your entire body. This has to do with that inflammation that it starts with. Osteoarthritis is in fact a signal that the body is deficient in nutrients. The body uses the nutrients present for your essential organs such as your heart and liver. Just like in a panic situation your heart and muscles get blood to take action instead of your stomach which "only" has to take care of digestion. That is equally less important in a panic state. Your joints are “low” on your body's priority list, as are your skin and hair. You can survive just fine with some wear and tear on skin, hair and joints. So they get less nutrients. Osteoarthritis has everything to do with how you feed yourself. Like almost all chronic diseases, by the way. It is therefore important to ensure good nutrition and therefore sufficient nutrients. This is not to say that it is always preventable.

As we age, we become more prone to inflammation. It is therefore important to delay this process as much as possible. Osteoarthritis also has to do with the balance between free radicals and antioxidants in your body, or the oxidation process. This too cannot be prevented, but it can be kept in balance. Eating like our ancestors did before agriculture and livestock were invented is the best thing you can do to fight inflammation like osteoarthritis. In particular, a good balance between omega 6 (vegetable fats) and omega 3 fatty acids (oily fish) is important. Not too much omega 6 but plenty of omega 3 is the advice. Bit of trouble when you are allergic to seafood like me.

Dairy, bread and too many fast carbohydrates can also cause joint problems, so it is important to reduce them. This also applies to red meat.

Soon I am starting together with my wife on a program where they learn us hopefully more to live a happier and healthier lifestyle. I will suffer from pains as I will go to gym again and having a few muscles being not in the best shape. The best is yet to come and the holiday season is on it’s way.

I will try to blog a bit more again although it is painful to my wrists and fingers.

The Old Sailor,