I am so busy these days as I am looking to buy a small house under $300 000, but having hard time to get it near my work place. So, I started to look little far from my work.
Currently, I am living with my wife in a tiny one bedroom apartment in Toronto area with $1125 monthly rent. We did some calculations and decided that owning a house will give us some financial advantage for long run. Owning a house is one of my financial goal for the year of 2014, and I am getting nervous as days past on.
In the current low interest rate, we can get a 5 years fixed mortgage for 2.99% which costs $560 per month. Plus, property tax, home insurance, utilities fees will be around $550 per month. So, owning a home will cost almost same amount as my renting cost but with some advantages:
- Great privacy
- Home usually increase value for long run
- More space and rooms increase our quality of life, so we could move to the next phase of our life (kids :d)
There are some disadvantages as well:
- Mortgage payment usually higher than rent
- It is long term financial commitment
- Need a larger down payment (lock more money in one basket)
- There will be some maintenances expensive (repair, replacing furnaces, etc)
If we can manage to pay the housing mortgage in 10 years (I know it is really hard, but I will try my best do so) and overcome the disadvantages, then we will have a solid assert and quality of life with great privacy.
So, what I have to do now?
I should reduce my debt level and maintain better credit score until buy the house, and save some money for down payment. This is one of the reason I did not buy new stocks in the last few months, and trying to pay off my credit cards debts. Currently, I have $20 000 in my saving account and I need additional $10000 so I can put at least 10% down payment for my first home.
All I know, the year 2014 will be very busy and challenging. Lets see!