You can build a “house on the sand” if you aren’t intentional.
My family could save up a five percent down payment on an average priced Peterborough area home in ten months with our current indebtedness and budget.
There’s a great reason that we’re not doing that.
In our experience, people with debt shouldn’t buy homes. Any debt. Car debt included. Homes are supposed to be a blessing; not a curse. How a home goes from being a blessing and becomes a curse depends on your planning. Our planning sucked. When your income is going towards payments, you’re going to find yourself cash-strapped. That’s one of the parts HGTV doesn’t tell you.
Home repairs can be costly; getting into rural living we were dealing with ants, rodents, septic, well issues, oil heat, aluminum wiring and other electrical issues - we also had a home in Peterborough that had a cheapskate DIY touch to every portion of the house; shoddy plumbing work, shoddy electrical. Even our builder house (with a Tarion warranty!) had some concerning corners cut. All these homes were inspected by a home inspector before purchase; all had (financially crippling) remediation needed.
5% down and optimism is not a good strategy for home ownership - you need an umbrella; eventually, it’s going to rain. You have to have your emergency fund established (Baby Step 3) to own a home with confidence.
Stick to the plan - Baby Step Two, pay off all consumer debt including vehicles, low-interest loans, money owed to family - everything. Baby Step Three, build an emergency fund of 3-6 months expenses. Baby Step Three B - save up no less than a 10% down payment on a 15 year fixed rate mortgage where the payment is no more than 25% of your take home pay.
When the rains come, and you’ve “built your house on the rock” financially, issues that come up will feel like an annoying inconvenience, not devastation.
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