When to buy house, kid living with mom

[Just a Guy]

Well, I still stand by my original advice. That being said, to answer your questions, higher down payment, shorter amortization. Although, if you ask for a longer amortization and the set your payments as if it was shorter (get 30 years, pay like it was the shortest you could afford say 15-20), it may give you some options if something goes wrong in the future, or if you turn it into a rental and need lower payments.

As a rental, it won't cash flow, so you'll be paying out of pocket if you go that route.

[SheaButters]

What industry are you in? Is your company stable? Is your pension likely to be around and fully funded in 30+ years when you expect to be able to retire?

I work as a letter carrier for Canada Post, stable, despite what anyone says, they just spent 2 billion dollars on machines that ONLY SORT LETTERMAIL, its fair to say they aren't going anywhere, since they are updating their whole company nation wide, buying each letter carrier a car, and forcing him to do parcels(where the money is)
Where they lose money in letters, they make up for in flyers, some days we have 8 sets of flyers, canada post collects 13 cents each, and the carrier gets paid 2 cents, so they profit 11 cents, and each carrier has say 600 houses

Pension could be questionable right now its indexed, but we are still under 3rd party negociations as we got legistated back to work because the company locked us out,
I have no fear that the company will still be around for at least 20 years, as its the 3rd lowest stamp in the world, and places that are public have 17 different companies delievering mail, and it's total chaos and no good!
Canada Post has also made a huge profit for the past 16 years (but that streak ended this year due to the strike[fear of mailing] and all the new machines and such)
The CEO of Canada post last year made just over 300k wages, but got a bonus worth more than his wages, putting him ahead of Stephen Harper

I'll give you some history as someone is probably going to knock at it
Winnipeg is the first city to be "modernized" with that, we got 700 cars and a few new buildings

We used to have 125 truck drivers (parcels and pickups)
Now we have 15
We used to have 800 letter carriers, now 700
And inside the plant, 400 workers, now 300
They didnt lay anyone off, just simply didn't hire new people as older people were retiring
So for anyone who says our job is easy, you can see it just got harder, as letter carriers now have longer routes, have to deliever parcels, pick up stuff, etc...

They make half the letter carriers start at 7am sort mail
then the other half comes in at 10am, sorts mail, SHARING a case (real estate is expensive.. less room needed) and now those guys have to clear the red boxes which have 5pm clearance times

like any company, they do what the can to make the most profit

[Causalien]

On the money side, a bigger down payment is always better.

Few questions:

What industry are you in? Is your company stable? Is your pension likely to be around and fully funded in 30+ years when you expect to be able to retire?

If you can buy a house now, and never move you'll save a lot of money in moving expenses, realtor fees etc.
On the other hand, if you stay at home, you'll probably save even more money until you eventually decide to leave.

Unlike some other posters here, I don't see the fact that you are still living at home as that negative. If it helps you get ahead the way it helped your brother, I'm sure your mom is happy to have you there. In many European cultures, kids stay at home into their 30s, often a result of extremely expensive housing markets that make the GTA/Vancouver look cheap. If it makes financial sense, why wouldn't you?

Like any big decision, take everything into account before doing anything.

I'd equate your situation to my decision not to buy a car. I save ~$15,000/year, but give up some major conveniences. Totally worth it in my books, because the inconvenience is relatively minor in relation to the huge savings.

I had the same financial income as you at your age without the savings part. So I am guessing you get two checks per month in tunes of $1500 here's how much things costed back then for me on a Condo that costed $200 000:
Mortgage $900/month
All insurances $100/month
Condo fees: ~$300/month
Notary: $1400 buy and sell
Mtg breakup fee: $700
RE agent: ~8% (5% buy and 5% sell)
Appliances and furniture for the first 6 months cost $1200 per month
Food and groceries frugal: $200/month, non frugal: $400/month
Repairs allocation: $100/month
Taxes: ~$2000/year

What's important is this conclusion. After 30% rise in the RE value, I got away with no gain and no loss. Compared with my other investment ROI, this is one of the worst ones. Compared to my previous living arrangement which costs only $400 per month, why the heck did I do this? For science of course.
Now you have the full weight of CMF knowledge at your disposal telling you that owning is a shit deal. Your bro made out like prince charming raping sleeping beauty because he happens to be in the work place at the recovery phase of the economy (I am guessing 2003 ish?) and caught the upswing. You... may not be so fortunate.

You ARE NOT your brother and the sooner you realize this the better it will be for you.

Next I would like to tackle the situation about living with parents. If your mom is in retirement, I have to agree with you somewhat that living together serves a good purpose. When we are young, we seek independence, but as we get older, what we seek is more interdependence. I come from a very traditional family culture so there's only pressure to stay with your parents and never pressure to move out. I did, fully embrace the western culture and tested my wings at 18 and boy, what a ride it was.

It was the reason why I had no savings when I was at your age. But it was also the greatest baptism by fire because I was forced to live/deal with people of very different values and hence arrived at my own values. If I had never moved out, I'd just be a more refined version of the family values, never knowing what could be wrong with it. This is why most people suggest you move out.

I suggest you rent a room close to your mom, about a 5 minute drive away, with roommates... if this whole exercise is about testing your wings. The scrooge in you will ask why throw good money away, but the devil in me will tell you that it is never throwing money away if the experience earned outweighs money. This is why, people are telling you to rent. A lot of us has been there, or have siblings that are the opposite of us and we know what is needed for you. But it will not sound right to you because you have never experienced it. I am guessing most of us won't bother trying to explain this because we know that it will be hard to swallow. If you want to change, you'll look for it. Looking at buying a house is a subconscious acknowledgement that it is necessary. What is different from your message and ours is this:
You are saying: "I am going to change... a little while putting a lot of money on the line"
We are telling you to: "Change MORE and put less money on the line"

[kcowan]

My best friends brother and my brother lived at home. They never left because it was so convenient and cheap. That is why Just a Guy resonated so much wiuth his advice. Of course, your situation is different. Just make sure you are buying a place that will last you at least 5 years and preferrably 10. The costs of moving house are very high. Good luck!

[KaeJS]

First off, move out as soon as you can.

You've, so far, led a very sheltered life. Nothing wrong with that, but the world is a lot harder than you think. There is a reason birds push their young out of the nest, it's not because they are mean, it's about survival. Birds who don't get the push are more likely to get eaten in the future.

I'm probably one of the only one's to disagree with Just a Guy.

Telling the guy to leave home ASAP is probably the worst (financial) advice you could give. Social/Learning/Growth/Actualization advice is not Financial Advice. And this is a financial forum.

Yes, the world is hard. Yes he should be contributing, maybe paying $300 in rent and doing his own laundry and making his own food.

However, it's a big financial mistake to leave home.

I am 21 and will be living on my own in January (definitely not by choice) and I can't tell you how stressed out it's making me feel. I understand how hard life can be, and that's exactly why I don't want to leave. Once I leave, I am screwed. You are a few years older than me (and make $20,000 more than me), so you've had some more time to "save", so in your case it is not so bad. However, I think everyone should stay at home until 25 (which would be one more year for you) in order to save up more capital.

It's a lot better to stay at home and not be naive (ie, realize that there is a world out there that can eat you) so that you can safely save money in a sheltered environment before the wolves come out for a feast.

However, you know what they say...

The one's who can make it in this world get the shitty part of the stick for that reason. Everyone else needs a hand holding. They know you can handle it, so they dump it on you.

My advice? Stay at home, and for flock sakes, you are only 24. Stay away from the lady friends, too.

Why does everyone feel the need to grow up so fast?

Nothing like increasing liability/responsibility early...

I don't understand....

[KaeJS]

Are you guys telling him to move out and/or contribute to his mom because you honestly think it's best for him, or because you're jealous that he gets to live for free and save all his money? I think he has a really good thing going, he has an opportunity to save money that he'll likely never have again. From a purely financial point of view, he should stay put and continue socking away that money. And as for his mom, he's only taking advantage of her if she's poor and struggling to support him, if she's comfortable financially then I wouldn't call it taking advantage of her. At least he's saving his money, many people whose parents let them live rent-free spend all their money on financing a new BMW M3 or something. I would stay put for a few more years.

This is the post the original poster should be looking at.

I feel like my mother is kicking me out because she knows I have great financial and money management skills. Sometimes it sort of makes me angry. I feel like if I wasn't as diligent with money, I would have got a better hand holding. I never even played sports or did anything costly as a kid - I was simple. It's not like I ate up her extra cash by playing football and needing new clothes. I don't even ask for birthday or Christmas presents. Hell... I still wear clothes that I wore in 9th grade with holes in them. What do I care? Clothes don't make a person. The person makes the person.

What's upsetting is the fact that I strive to save so much and will even refrain from going out with friends in order to save, and will now be kicked out. It's hurtful, stressful, and very disappointing. And as a result, I am staying in even more because I am stressed about the costs of living.

As I said, Shea, my advice to you is to stay at home as long as possible. I get the fact that bringing girls back to your mother's place isn't exactly fun (and yes, some of then will run, that's a fact of life) but hey, they won't always run. Especially if they live at home, themselves. Some girls (yes, as someone said before, girls, not ladies) will run because they only want to use up everything you've got. You don't want one of those chicks, anyway. Those are the one's you take to a hotel and then say "See ya later".

Stay at home. You'll thank Sherlock and I in 10 years.

[Jon_Snow]

Reading through this thread really brought back how tough life can be starting out. I admit, I was quite bummed when I turned 40 recently. But thinking about it, I don't think I'd trade where I am today (rapidly appearing grey hairs notwithstanding) at 40 to where I was in my early 20's. I also got the boot from my parents house at 21 - looking back, it was probably the best thing for me. I think I may have had 3k net worth at 21 - the first year out from the "nest" was a tough one - living from paycheque to paycheque builds character I guess? I'm not really sure how the hell I got to where I am now. Worry not, you younguns' have time on your side...

[Just a Guy]

I'm probably one of the only one's to disagree with Just a Guy.

Telling the guy to leave home ASAP is probably the worst (financial) advice you could give. Social/Learning/Growth/Actualization advice is not Financial Advice. And this is a financial forum.

Ahh, but then you haven't lived on your own. Financially it may be the best thing for him. When my company was having trouble is when I turned to investing and made my money. The guy who runs my favourite blog had a debilitating car accident, was self employed and couldn't work for several years...he started investing in real estate to save his family.

I don't know about him, but I certainly wouldn't be where I am financially had I not run into problems. Being self employed, you don't get EI, benefits, or any type of safety net. I don't have wealthy parents to bail me out, it was sink or swim.

Had my business continued to be moderately successful, I'd probably be doing okay today...but because it did, and I had to deal with it, I now have financial freedom to make choices.

So yes, I think it's also good financial advice.

[KaeJS]

So yes, I think it's also good financial advice.

Understand what you're saying, but I still respectfully disagree.

[Argonaut]

I'm a young guy who will side with the old guys in this thread. Been living on my own since 19, only way to go. Rent don't own. Stay liquid, stay mobile.