As the Money After Graduation community starts to number in the thousands, I feel so privileged to be able to hear your stories and share them with others. One of my favorite posts of all time is Your Dark Financial Fears, and last week’s The Truth About Millennial Debt shed even more light on your experiences.
The past 5 years of my own financial journey is documented in the archives of this blog, but that is only one perspective and doesn’t speak to the diversity of experiences each of you have when it comes to income, debt, and financial goals. It’s for that reason that I love when you share where you’re at, where you’re going, and what you think about your journey. This is another one of those posts.
The stories below are shared by 20- and 30-somethings across Canada and the US. Some are new homeowners, some have had a place for years. The answers represent different markets, different incomes, different opportunities, and different values. While some financial decisions are better than others, there’s no one-size-fits-all when it comes to the “rules”, and this is especially true when it comes to home ownership.
How much did you save for a down-payment and how did you save for it?
“We put down 10% ($24,500), which we accumulated through savings and frugality, plus some life insurance money when my father passed.”
“We had been saving for a long time (4 years), knowing that we would want to be in something bigger than what we originally had. We also received a monetary gift from family to top up the rest.”
“We put a 10% down payment but we shortened the amortization period to off-set the CMHC we incurred and we have increased our bi-weekly payments each year since. I didn’t do the math if this equaled out in the end but at the time it was what was best/worked for us. We saved for the down payment the old fashion way: by not spending more then we earned and saving every payday.”
“Our down payment was $48,000 (give or take another hundred, it was a weird uneven number). This was the result of years of savings, combined with some gift money from our wedding, and $15,000 from my RRSP (which I’m currently paying back pronto!)”
“We started with a condo back in 2008, pretty bad timing obviously, and we took a calculated risk going in for 40 years with zero down so that we could get into the market. We had a variable rate and at the time it was prime minus, so when rates tanked we were at something like 1.8%. We put a lot of sweat equity into that condo and ended up selling it for a profit in 2011. We used that profit as a down payment for the house we live in now. We only put 5% down and we bought the house when a 35-year mortgage term was still an option.”
“We currently own 2 homes. We bought our first ‘starter’ home in 2011 with 5% down. I HATED paying the CMHC fees and vowed never to do it again! We just bought a new (to us) house in Oct 2015. We were able to put 20% down on $550,000 mortgage.”
“I put down the minimum amount down that I could to get the best interest rate I could, which happened to be 25% down. I also took out a 15-year mortgage for the primary reason that it would give me a better interest rate. I wound up with an interest rate of 3.00%.
“Our current down payment is at $50,000 with $25,000 coming out of my RRSPs, $10,000 from the bank, and $15,000 from my husbands account. We have also been promised some help from my in-laws… but with no specific number so we are not counting that.”
Has your house appreciated in the the time you’ve owned it?
“It has appreciated well in the last 3 years, if everything goes to plan when I sell, I should walk away with ~$70,000.”
“The house has a rental suite in it and it pays more than half our mortgage. We’ve put a ton of work into this house as well, and after 5 years our living space has been completely updated. Our mortgage is ready for renewal, and because the market is so hot, right now the value of our house has shot up. We’re going to have it appraised and refinance at the appraised value so that we can take out some money for a down payment on a second house. The first house will eventually become a rental property with two suites, one up and one down, and we will be cash positive on it from day one.”
“My house has appreciated 23% over the past 4 years from when I first bought it.”
“So far where we live the houses have not fallen drastically or at all in some areas, so we are hoping to ride that out.”
How does home ownership fit with your lifestyle and overall investment strategy?
“We have other investments and save for retirement in the more traditional way but also see our house as a retirement vehicle.”
“I bought a condo in about 3 years ago. I have a meeting with a realtor today to talk about selling it. It isn’t the amazing financial decision I thought it would be. The more I learn and read about personal finance, the fewer people currently advocate ownership as a positive financial move. The added stress of maintenance and Homeowners Associations isn’t even close to being worth it. I bought where I could afford, not where I actually wanted to live. I’m giving it up to rent in a more central and fun area. Slightly more in rent than my mortgage, but less in every other category and much improved quality of life.”
“To be honest when we bought the home I didn’t see if as an investment, that might be stupid but I just saw it as a home and a place to be a family. I will 100% say that I did buy into the belief that you “should” buy a home rather then rent but now I know that it all depends on a person’s situation.”
“After only 1.5 years of living in our condo, I can see a huge improvement in our lives. We own less, commute is shorter (my husband walks 10 minutes to work) and we have regular access to our building’s gym and swimming pool which we use almost every day. I sold my car and we go out much more than we used to now that the city is literally our front yard. The only (small) downside will be trying to expand our family in our 1-bedroom, but it’s definitely do-able and hopefully won’t be for a couple more years.”
“The reason why buying that townhome was one of the best decisions really goes beyond the financials – it’s because I have absolutely fallen IN LOVE with my home. It’s in a great community, I have great neighbors, I love my growing city. It’s worked out great for me from a financial standpoint, but even better from an emotional standpoint, and I think that is something us finance nerds often overlook.”
“I wonder sometimes about homeownership versus renting. This place felt like a much more modest decision when I bought it for $360k four years ago, compared to renting a one bedroom apartment for $1,600/month. But now I feel uneasy owning a half million dollar condo, even though the mortgage is now less than my annual salary and if we wanted to rent a similar place we’d be paying almost $4,000/month with utilities and parking these days. It feels so undiversified, even though it really is a good diversifier to my stock investments.”
Hope you enjoyed this as much as I did! Thanks again for sharing your stories.