Monday, October 15, 2012
simon says: take three giant steps forward
Life is full of surprises.
And I like it that way.
No matter what you plan, events usually turn out differently than you anticipated they would. And almost always for the better.
Take my house hunting adventure as an example. While I was visiting Pátzcuaro, several thoughts came together in my libertarian mind. It may be time to settle down a bit and own a house. It would be nice to play my music at the volume I like it. It would be even better if I also had a big dog.
The three could easily have been resolved independent of each other. After all, I could have a dog where I am renting now. But not the loud music.
Interestingly, I thought I was planning on becoming a loud music, dog-caring homeowner high above the south shore of Lake Pátzcuaro. But all of that changed when I got back to Melaque.
Even though the heat is often a challenge for me, I have spent four years here building up a network of acquaintances. I realized how valuable that was the first night I came back. And the fact that the house that had drawn me to Barra de Navidad was back on the market seemed to be something more than coincidence.
When I started tapping up some calculations on the computer, I had two potential sources for the purchase price of a house. What I thought would be easiest was taking a loan on my 457 deferred compensation plan. I had heard it was possible to use it as collateral.
What I heard was true. If I still worked and was contributing to the plan. Once I rolled the money over to my IRA, the Internal Revenue prohibits me from using it as my play money.
For obvious reasons. The "deferred" portion of that plans means income taxes have been deferred until I withdraw it.
For most people, the plans are a great deal. Earning the ability to pay taxes at a lower marginal rate after retirement.
But if I withdrew the purchase price as a lump sum, the marginal rate would have been staggering. And if there are tax rate increases at the start of next year, I would have been one of the fish in the barrel.
So, that idea was out.
The other source is the equity in my house in Salem. I own it outright. There was no reason I could not take out an equity mortgage. Until I realized, in addition to the $1000 a month I am currently shelling out to run the house, I would be making a large mortgage payment.
Then the obvious answer hit me. I needed to do what I should have done six years ago when commenter Kim suggested it. Sell the Salem house.
That is what is happening now. My realtor has made a checklist of the few things I need to do to get it on the market. The biggest item is throwing out the accumulations of several decades. Or finding homes for things that others can use.
So, early in November I will fly north to get the repository of my infamous hot tub ready to turn over to a new owner. Someone who can use the place better than I can at this point in my life.
All of that is prelude, of course, to answering the question of which house has caught my interest.
The winner is the house that got the fewest number of votes in my poll. The large white house in the country. The only option that will accommodate both a large dog and big sound.
We are currently in negotiations. If it turns out that we cannot come to a deal, I will be no worse off. I will be rid of the Salem house and I will still have a place to live on the laguna.
And no matter which result, life is going to just getting better and better.