but my boyfriend and I are almost positive that we will be taking out a 100% mortgage at the end of this year to buy ourselves a unit.
Why?
Because we don't really have a choice.
At the end of the year, our flatmate (boyfriends sister) will be moving out. Our rent is $390 per week. While we COULD afford the rent between the two of us, there isn't a chance that we would consider paying that amount of money to live in someone else's house.
There is also not a chance that we would live with a stranger, and there is only a very small chance that someone we know would move in with us, as everyone is already shacked up with someone else presently.
If we were to rent our current house at $400 a week (as will be the price by the time our lease is renewed) we would be shooting ourselves in the foot. It would be making it almost impossible to save money for a house deposit, as all our extra money we currently are saving would be going on rent, therefore in a years time we wouldn't be any closer to a house deposit than we are right now.
If we were to put an extra $100 on top of the $400 per week, it would be enough money to pay for the repayments of a unit in the vicinity of $240 000 - $300 000. Taking into consideration interest rate rises which may occur, we would be good for it.
I am guessing you are wondering why wouldn't we rent a unit (at around $300 p/w) for another year to save money? Well one reason is BF's cars. Currently we have a double garage, which houses two project cars (read: not working). Now, BF would be willing to sacrifice them to go to storage at his mates (no cost) if we were to BUY a unit.
However, he doesn't want to rent a unit because, well, he doesn't like units to begin with, and it will mean that he will be giving someone else money to live in a tiny box, that has only one garage where he cannot be close to his beloveds. It would only be worth it, to him, if the unit was actually OURS, because there would be a meaning behind putting his cars in storage.
Some of you may think this is silly but I actually understand it, and anyone that has an attachment to a certain car might probably understand it too. I don't expect you to understand it, I guess is what I am saying.
It's hard to explain I guess.
A unit (or townhouse, or duplex) would not be ideal for us to live in forever. I want to live in a house. BF wants to live in a house. However. In the areas where we want to live, a house costs between $450 000 and $600 000. It would take us a very long time to save for a decent deposit on that amount of money, however, if we were to get our foot in the door now, and purchase a cheap, renovateable unit for $250 000, in a year or so we could rent it out and use the equity to buy a bigger unit or house, and so on.
so i think that's what we are going to do...
you will think i'm stupid
July 23rd, 2008 at 05:08 am
July 23rd, 2008 at 11:23 am 1216812212
July 23rd, 2008 at 11:36 am 1216812980
You should also only borrow up to 25% of your take home. You don't want to be house rich and cash poor. Just some advice.
July 23rd, 2008 at 01:45 pm 1216820737
July 23rd, 2008 at 04:35 pm 1216830928
I think the two key sentences in this post are:
I WANT to live in a house
BF WANTS to live in a house
Neither of you NEEDS to live in a house. I'm just saying . . . . .
July 24th, 2008 at 07:41 am 1216885301
SAVINGFAIRE: exactly, that's why we're buying a UNIT to start off with, to get our foot in the door. i'm sorry, but there isn't a chance when i have kids that i'm living in a unit. no way.
creditcardfree: BF currentl works in the family business. if it goes bad, he has guarunteed work with two other people he knows, with a minimum of $1000 wage per week. i know that i have a job permanently at my current work # 2 (which is my main income) atleast 22 hours per week, or more if i want.
merch: i talked to a couple of people who work in the loan/banking areas and they all recommend that in this short amount of time, i save as much as i possibly can and make the minimum payments on my loan, so that i have cash at the time of purchase. i was informed that if i needed to pay off the personal loan and had the money there, it would be good, however it would be BETTER to have that money incase i needed it for some sort of deposit. funny how these things work sometimes.