Author Topic: Considering buying a home, please check my numbers and strategy.  (Read 1432 times)

Wiggle

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I am currently in the market for a home in the 150-200k range and close to work.  Here are my current financials:

Cash
$2,500

Investments
$5,000 /w TD med risk
$5,000 /w TD higher risk
$27,000 (total) between an employer RRSP and ESPP.

Liabilities
None

Until recently I had more money in cash/savings but have moved some into the TD accounts to reduce losses against inflation.  I am planning on buying a home with around a 10% deposit (so $15,000 to $20,000).  Is there any reason not to use the Canadian homebuyers plan on the TD accounts?  I was hoping to continue growing and contributing to these accounts and then using the Homebuyers Plan to pay the deposit while leaving my main RRSP/stock plan untouched.

Currently I am contributing about $1250 per month to my work account (including company matching perks) and about $500/mth to the TD accounts.

retired?

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Re: Considering buying a home, please check my numbers and strategy.
« Reply #1 on: October 06, 2014, 12:29:12 PM »
Don't know Canadian stuff, but I assume that is a program that lets you count the TD accounts as collateral.

First question - where is your down payment?  With the little you've presented, I'd say that you cannot afford to buy a home.  Something is missing.

In the U.S. you'll pay private mortgage insurance if DP is < 20%.  And, the free-lending promoted by Fannie and Freddie (3% down) is what caused the crisis in the U.S.  People buying homes that were not in a position to do so - whether through their own stupidity or predatory lending.

Wiggle

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Re: Considering buying a home, please check my numbers and strategy.
« Reply #2 on: October 06, 2014, 12:34:07 PM »
The homebuyer's program is an RRSP loan essentially.  I was going to use the two $5,000 accounts plus more as I accumulate over the next 6 mths to 1 year.  I have run the numbers on the ownership vs my current renting situation and the cost difference with mortgage, taxes, utilities is not much more than I pay now, it is quite sustainable.  My numbers were also based on the assumption I'd be paying off the mortgage in 15 years. 

I'm mostly looking for whether it is sensible to pay the down payment in this fashion or should I instead scale back RRSP contributions in favor of collecting more cash.
« Last Edit: October 06, 2014, 12:37:43 PM by Wiggle »