New to forum, need some direction

[Young&Ambitious]

Alright I'm intrigued. I've starting a spreadsheet to do the analysis but the info I'm missing is the house purchase price...OP?

[MoneyGal]

Ideally, you would assign differing probabilities to the variables you are modelling. But Excel is what we call the "brute force" method; you are somewhat limited in what you can do.

[mbk.2k3]

Alright I'm intrigued. I've starting a spreadsheet to do the analysis but the info I'm missing is the house purchase price...OP?

Ive seen solid starters pop up for 300-350k range in the few areas we are considering. They dont last long either.

Lets say 325k?

Appreciate this. Cant wait to see numbers.

To note: i can continue living at home until we've saved up enough. In a years time we'll just start looking with better focus. didnt mean i want to move in july 2013.

Good suggest to get pre approved. Ill look up requirements for that.

[Sampson]

But Excel is what we call the "brute force" method; you are somewhat limited in what you can do.

You can still do Monte Carlo simulations using Excel right? Using the "At Risk" add-in application.

[MoneyGal]

Yes, but at its heart MC is still a statistical approach, not probabilistic.

[Young&Ambitious]

Ok so I didn't do any probabilities, I'm no whiz here! Although how do I upload an excel file? In the attachments browser I didn't see excel as an option?!

Regardless my options & asset results at year 16 were:

Scenario A) Use HBP. Use RRSP deduction for general spending. Net result $69,914.61
Scenario B) Rent yr 0 & Invest funds in side RRSP. Use RRSP deduction towards mortgage in y 1. Net result $180,341.55
Scenario C) Use HBP. Use RRSP deduction for mortgage payment. Net result $244,681.80
Scenario D) Rent & Invest funds inside RRSP. Use RRSP deduction to do another one time contribution to RRSP. Net result $220,465.75

Included in those figures (as applicable) is:
- mortgage interest savings resulting from home buyers plan for the downpayment and/or use of applying the rrsp deduction received from the 1st rrsp contribution,
- the RRSP plus growth @ 8%,
- CMHC interest savings (difference between the larger downpayment made able by the HBP versus not using the HBP and doing a 5% downpayment), and
- house principal (assume no appreciation).

Some general notes: Mortgage 25 years assumed, calculated at 4% (long term is unlikely) with monthly payments. No inflation included nor appreciation on house.

My takeaway is that, assuming that renting versus monthly home carrying costs are the same, that one would be about the same off. Note that Scenarios includes the portion of one's mortgage that goes towards principal. So I think the big takeaway in this scenario (assuming no market appreciation, market crashes, increases in mortgage rates beyond the 4% used here) for this couple and other people looking at similar situations is comparing the monthly carrying costs of owning versing renting.

[Sherlock]

$300 to OSAP payment
$200 ish for all our rogers services (i help out at home)

Ouch!

I pay $25/month for my cell phone, and $40/month for my internet. I have no cable. What do you spend $200/month on? I would ditch Rogers for internet and look at Techsavvy (300gb/month for $35). I would ditch Rogers for cell phone and go with Wind Mobile or Mobilicity ($40/month for unlimited talk, text, and data). I would ditch Rogers for cable and get an antenna (all Toronto channels for free) and Netflix for movies ($10/month).

Also why are you paying $300 for OSAP, you should be paying that off much more aggressively. You should at least double that to get OSAP done with as soon as possible, because it makes no sense to have savings earning 1.4% when you're paying 5% interest on OSAP.

I would also echo others' comments that you shouldn't buy a house now (many economists predict a housing crash soon so if you wait a few years you could save tens of thousands of dollars) but if you ignore my advice and buy a house then try to get $25k in your rrsp and withdraw that to buy a house (it'll be 50k for you and your wife combined) as that is an easy way to get a higher downpayment.

[Sherlock]

Unfortunately, lack of knowledge does not prevent TRM from dishing out copious amounts of advice on topics he knows nothing about.

I think these kinds of attacks do not contribute to this forum in a positive way. Just because your views differ from someone else's doesn't mean that he's wrong. It's the wide diversity of views that makes forums like this one a great place to get informed. Debating is good for the forum but personal attacks are not.

[mbk.2k3]

Ouch!

I pay $25/month for my cell phone, and $40/month for my internet. I have no cable. What do you spend $200/month on? I would ditch Rogers for internet and look at Techsavvy (300gb/month for $35). I would ditch Rogers for cell phone and go with Wind Mobile or Mobilicity ($40/month for unlimited talk, text, and data). I would ditch Rogers for cable and get an antenna (all Toronto channels for free) and Netflix for movies ($10/month).

Also why are you paying $300 for OSAP, you should be paying that off much more aggressively. You should at least double that to get OSAP done with as soon as possible, because it makes no sense to have savings earning 1.4% when you're paying 5% interest on OSAP.

I would also echo others' comments that you shouldn't buy a house now (many economists predict a housing crash soon so if you wait a few years you could save tens of thousands of dollars) but if you ignore my advice and buy a house then try to get $25k in your rrsp and withdraw that to buy a house (it'll be 50k for you and your wife combined) as that is an easy way to get a higher downpayment.

1 cell phone + landline (fam needs it) + cable tv + internet
i negotiated and got it down to 175 ish going forward.
and in 4 months we are cancelling cable completely.

noted your point on osap. i need to get that osap amount down however i also want to up the rrsp savings for that downpayment (for whenever we decide to purchase)