I'm going to dig deeper and work out a plan in Excel to see if it's worth it.Originally posted by JDMsomething
Why not have it all? Don't let people crush your dreams telling you to live below your means etc. EXPAND your means, and your way of thinking.
I didn't read all 4 pages but I doubt these options were mentioned:
1. Since you are living at home, you don't NEED to buy a house, but want to start building equity right? LOOK FOR A SMOKING DEAL. Work with good realtors, look on Comfree Etc. You might only find one every 2-3 months, but you are in no rush anyways.
Lets say you can find a great deal on a house worth $300,000 for a 20% discount of $240,000. You put 5% down(12,000) but your mortgage amount will be almost $235,000 with CMHC fees. Guess what?!?!! A couple months after you close, if it is still worth $300,000 or say you fixed it up and now it is worth $320,000 you can refinance and get 80% of the NEW appraised value as a loan.
So at $320,000 @ 80% LTV you would get $256,000. So you actually get about $21,000 back after paying out your existing mortgage, at crazy low interest rates, and still have your 20% equity.
An important point to note is when getting your first 5% down mortgage make sure it is open, or it is just a 3 month interest only payout penalty so when you get the new financing it is easy and cheap to payout.
For this to work you NEED TO BUY RIGHT. But don't be fooled, these deals are out there, some might need some work, but if the numbers work, who cares?
2. There are lots of people out there for whatever reason need to move, have a huge payout penalty and you can still assume their mortgage, some even for 0 down. This is a little more complex and I would only recommend it if you are dealing with a realtor who has done these before or a competent lawyer.
3. I also think it is a good idea to rent your place out at least partially. Why not look for houses that have a separate back entrance etc so you could make a suite or in law suite at least and rent to a buddy. That way you still have separate spaces, but you can offset your costs.
And to all the people who are saying "If you don't put 20% down, you can't afford the place." So dumb....by that logic if you can't put 100% down, you can't afford the place.
You need to think bigger to achieve your dreams, not smaller.
From what I've seen, the viable properties are $300k+ and anything below is not worth the mortgage pain. Also, a 20% discount is a bit steep for a house.
Thanks! Here's to hoping I'm making the right one. It starts this Christmas!Originally posted by chkolny541
Incredible advice, i think your making a good decision!
Originally posted by max_boost
Studies have found $75K gross/year is the current optimal salary for happiness. Over that, it won't make you any happier. Take it from me and everyone else. Find that balance and enjoy your life. Be open to things and learn. Having more money will improve your long term outlook but it's so important to live in the here and now.