# home purchase mistake or just normal remorse?



## dave4374 (Jul 20, 2019)

Hi, 

I was looking to get some advice...My partner and I just purchased what we thought was our dream home but since signing the deal we have been sleepless and stressed.

Here are the rough details

We purchased an older home in Whitby for 1 130 000. 
We sold our home for 876 900 (a little less than we thought)

we plan to put down roughly 487 000 for a down payment..withholding a bit of money in case of unexpected repairs etc 

Our monthly mortgage payment will be 2700...when you add property taxes (assuming we dont get reassessed huge) adds another 620$ a month so 3320$

Extra expenses in the home are little more but nothing to crazy so it is kinda a wash in that regard.

My wife and I are both in the teaching profession..she makes 93k a year and I make just under 140k, so we bring home after taxes at 10k a month (usually a but more).

We also have three young kids and daycare costs of about 1000k a month..but this will be dropping to roughly 300 a month in a year.


My question to the online professionals reading this post....are we screwed? did we make an emotional decision that we will be regretting? Right now I feel as though we made a huge financial mistake and we are both super super nervous...although every mortgage specialist and bank claims we are very low on the debit to equity scale compared to other clients etc (some of these opinions are coming from friends in the industry as well).

Are we just having buyers remorse or should we start looking now for second streams of income? opinions are much appreciated

p.s I should add that we don't really live a glamours life..we have three kids so going out isnt really a reality and most of our time is spent enjoyed at a park with the kids and that sort of stuff


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## AltaRed (Jun 8, 2009)

If you have no other debt payments such as credit card balances you don't pay off, or auto loans, or similar, PIT of $3320/mo or so (property tax seems light BWTFDIK) is a manageable percentage of $10k/month. Yes, day care is significant, but is not over the top. Add in $1500 for utilities and food, and you have a margin of $4k/month.

I would not be stressed based on take home pay of $10k/month. That said, part of your regret is most likely the new, larger mortgage payment. You will be fine, provided you don't keep 'doing the move up' every 5-10 years. Eliminating mortgage debt is a most uplifting experience particularly by age 50.

Enjoy your new home.


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## dave4374 (Jul 20, 2019)

we have no other debts...loans..etc..prob within the next 5 years we may need to take on a new vehicle but even that purchase will be conservative.

We were hoping we could stay in this house for a long time and our next move would be 10 plus years from now and a downsize...

Really appreciate the advice as we are stressed out beyond belief!!!


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## OnlyMyOpinion (Sep 1, 2013)

Reminds me of when we bought our place. Didn't sleep at all until I convinced myself the bank would turn down our mortgage app and we'd be 'free'. Well, they approved it. We bought the place and are still here.
I agree with AltaRed.
Enjoy your new home.


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## Just a Guy (Mar 27, 2012)

I remember my first job right out of school, I was put in charge of a project who’s budget was over $1M. What I quickly learned back then was $1M isn’t a lot of money in the grand scheme of things. It was a useful lesson to learn early because it allowed me to do things like buy real estate. Last year, for example, I bought 8 places. Even at $100k each, I added $800k of debt to my balance sheet. Of course I also added several thousand dollars of income every month, let’s say $8k being conservative, but easier numbers to use. $8k makes way more than $800k costs, and it’s other people’s money. As they get paid off, they still make $8/month adjusted for inflation. 

Now the idea of going $800k in debt every year would probably scare most people, but for a few it makes them rich. 

$1M isn’t a lot of money in the grand scheme. Would I have done it, maybe, maybe not...is it the end of the world, or worth worrying about? Not really in your case.


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## dave4374 (Jul 20, 2019)

Thanks for the insight...we still feel as though the payments are going to have us living pay check to pay check...i guess this will be the case until we move and and adjust...everyone keeps telling us this size of a mortgage payment is the norm however I have already been running the numbers to move again we are so stressed....crazy that none of these feelings existed when we were making the offer..


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## dave4374 (Jul 20, 2019)

I should also ask if anyone has any tips for getting over the buyers anxiety? maybe we are too much into planning and preparing and should just not think about it


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## pwm (Jan 19, 2012)

I've been retired 14 years and we are living in our third house. I can tell you that in every case, after living in the place for a few years, I regretted not spending a little more, and that includes the current home, which was custom built. I suffered through the same anxiety as you are experiencing each time, but it will pass. You will be glad you spent the extra money to get what you want after you have been there a while.

Hope that helps dave4374.


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## dave4374 (Jul 20, 2019)

Yes the unbiased honest opinions are really appreciated..we built our last home and felt after a few years that we should have bought more....glad to hear the anxiety is normal


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## gaspr (Mar 24, 2014)

You may have done this already. Make sure you both have enough term life and disability insurance. Might help ease the anxiety...


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## AltaRed (Jun 8, 2009)

gaspr said:


> You may have done this already. Make sure you both have enough term life and disability insurance. Might help ease the anxiety...


Meaning each of you have full coverage to cover mortgage costs in event one of you becomes disabled or dies. Disability insurance is the more important of the two because: 1) it is far more likely to become disabled than to die, and 2) disability can be a financial burden. Should be group coverage available.


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## birdman (Feb 12, 2013)

My wife and I are retired, live in a nice home in the Okanagan, have a ski condo, and do anything we want to do, and spend less than $100,000. PA gross income. Yes, our children are grown and we don't have that expense but I fail to see why you should be concerned due to the high level of your combined income. To keep it real simple it would seem that your wife could easily make the house expenses, eg mortgage, property tax, utility payments and the like on her salary and then you have another 140,000. to cover food, entertainment, child expenses, savings, etc. Surely thats plenty. An approximate maximum mortgage calculation used by lenders in calculating affordability it Gross Debt Service Ratio (GDRS) and Total Debt Service Ratio (TDSR). Perhaps run your numbers and see how they compare. Here is a link explaining the calculation and maybe you may wish to run your numbers:
https://www.whichmortgage.ca/article/what-are-tds-gds-and-ltv-ratios-174913.aspx
I suspect that you will find that you are well below the maximum allowed which may provide you with some comfort. 
In regards to buyers anxiety the only thing I can suggest is something I recall from a course I took many years ago. Ask yourself what is the worst case scenario could be starting with some questions like "Am I going to die from it?", Is my wife or any of my children going to die from it?", "Am I going to lose my job over it"?, "Are we going to lose the house over it"?, etc. From the info provided I would expect that any issues you may be concerned about are small in the grand scheme of things. Enjoy your new home and be grateful of your family, your job, and life in general.


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## sags (May 15, 2010)

It isn't unusual to feel some stress about making such a big financial decision, but there are some things to consider that may help ease the concerns a little.

The house value will likely rise at the same time rising incomes will lower your mortgage debt to income ratio.

If you can afford the payments today, you likely will be able to afford them even more in the future.


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## Just a Guy (Mar 27, 2012)

Here’s something to get your mind off things.

In our house, we never look at problems, we always look for solutions. If you focus on a problem, that’s all you see and you get paralyzed, whereas many solutions exist and there are opportunities to resolve the problem. 

In your case, your problem is you are insecure about your income vs. Your new debt load. A solution is to spend some time and maybe look into learning about investing and passive income. There are literally infinite ways to generate passive income, with some research, maybe you’ll find something of interest that can generate money for you without a lot of work. 

Doing something will take your mind off of focusing on the wrong thing. Stop looking at the “problem” and focus on solutions.


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## dave4374 (Jul 20, 2019)

we did think about this and do have it...thank you for the advice


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## dave4374 (Jul 20, 2019)

the passive income and searching for solutions is excellent advice...I am in the process of lining up a part time job just in case...and everyone is right we should be and are grateful for what we have..it is hard though to not focus on the "what-ifs"


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## Just a Guy (Mar 27, 2012)

Remember too, there are no limits on how much you can earn from passive income, unlike a job which is limited by your time. 

On the subject of jobs, what is your time worth? Spending time doing what I want is far more valuable to me than anything people can pay me to do something for them. I’d rather spend time with my kids than spend time working. 

Our society is totally geared towards getting a job as the main way to make money...in truth it is only one way to make money. There are infinite ways to make money. 

If I were you, I’d try really hard to change my thinking. You focus on debt, jobs, work...I focus on family, enjoying a short lifetime, and doing whatever I want (not that I want much). You stress, worry, get stopped by problems...I look for solutions, never worry, and don’t have much stress because I’m always solving the problems I encounter. 

For example, last night I was coming home with my son, when his car experienced electrical problems...it was 9:45 at night, we were a long way from home still, he lost all the electric in the car. He was going to pull into a gas station, to take a look, we figured the alternator had gone and the battery was completely drained. 

Having guessed at the problem, I suggested we pull into the Canadian tire store several blocks away instead. We got there with 5 minutes to spare before they closed, I told him. To get into the store before they locked the doors and we were able to get a new battery. The battery got us home, and we ordered a new alternator. Sure beat sitting in a gas station waiting for AMA or a family member to come help. Only added about 20 minutes to our trip home as well. Today we’ll pick up the alternator and his car will be fine. How many people would be sitting waiting for help, then sending it to a mechanic, which are closed for the weekend, and be car-less on Monday?

I still remember my 16 year old daughter’s response to a blown tire. My wife was freaking out, asking what we should do, call the AMA, get it towed to a mechanic, etc...my daughter just looked at her and said, “we’ll fix it”, completely deadpan, and then proceeded to pull out the tools and replace the tire. As I said, we don’t have problems in our family, only solutions.

Oh, and try looking for better what if’s, for example what if your passive income paid your mortgage for you? It’s not that hard.


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## dave4374 (Jul 20, 2019)

That is great advice and sounds like you have things figured out family wise...a we will fix it attitude..is def. the goal.


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## AltaRed (Jun 8, 2009)

dave4374 said:


> the passive income and searching for solutions is excellent advice...I am in the process of lining up a part time job just in case...and everyone is right we should be and are grateful for what we have..it is hard though to not focus on the "what-ifs"


I think you are obsessed for no reason at all with gross income of well over $200k per year, and a net of $10k/month...after all deductions including, I imagine, contributions to excellent DB pension plans, health benefits, group life/disability, source withholding taxes, union dues. As I mentioned earlier, your fixed base costs including mortgage payments, property taxes, essential utilities, day care and food appear to be in the range of $6k/month. Almost everything else is technically discretionary, including smart phones. What can ~$4k month not cover? That is plenty to fund TFSA contributions every year, travel, clothing, entertainment and recreation. 

If you stay away from expensive toys for awhile, especially until you do the improvements you will want to do in the house and reduce your day care costs, I can't see how you are close to living from paycheck to paycheck. Enjoy your home and your family. It's those things that really count.


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## Just a Guy (Mar 27, 2012)

Another thing to consider, you can’t change the past, so don’t worry about it. 

My son used to be a goalie in hockey. One day, when he was very young, we went out back and I lit him up (which wasn’t easy to do). He got more and more emotional and it got easier and easier to score. 

When we were done, we had a long talk. Could he do anything about the puck that was in the net? No. As he got more emotional did his skilled increase or decrease? They got a lot worse. Could he stop the puck coming at him? Possibly. 

The takeaway from this experience was, you can’t do anything about the puck in the net, so don’t worry about it anymore. Emotions get in the way of thinking and ability, keep them out of the game. Focus on what you can have an impact on, the puck coming at you. If it goes in, worry about the next one. 

You’ve made your choice for the house, it’s in the past. Time to move on to other things. Being the right choice doesn’t matter anymore because the choice has already been made. Your emotions are getting in the way of you moving forward, so get control of them and deal with whatever comes next. 

I never regret choices I’ve made because I made the choice and there’s nothing I can do about it anymore. My life wouldn’t be where it is, had I made different choices.


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## dave4374 (Jul 20, 2019)

really appreciate the advice...it helps with the anxiety/nerves


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## AltaRed (Jun 8, 2009)

Just a Guy said:


> I never regret choices I’ve made because I made the choice and there’s nothing I can do about it anymore. My life wouldn’t be where it is, had I made different choices.


Except as learning experiences. It is one thing to become encumbered by past decisions, but it is wise to learn from past experiences.


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## mByG (Jul 17, 2019)

I think the only other thing to consider is getting adequate amounts of insurance given the new debt load.


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## Just a Guy (Mar 27, 2012)

I didn’t say I don’t learn from the past, but I also don’t regret it. 

Many times things that look really bad turn out to be of real benefit. 

For example, when I was injured my life looked really bad, I wound up being in debt up to my ears, I was in chronic pain, borderline depression, etc. However, it was the injures which forced me to learn about making passive income and investing. I wouldn’t have the assets I do today, nor the freedom, had I not gotten injured. At the time of the accident, I was living debt free and ran a company, pretty stable, yet no major upside in sight. Wasn’t a bad life, but certainly nowhere near as good as today. It also couldn’t handle a major disaster like being unable to work for several years.


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## jargey3000 (Jan 25, 2011)

you say you "plan to make a down payment"
has the sale/purchase already gone thru, or not?


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## kcowan (Jul 1, 2010)

What aspects of the new house make you consider it your dream home?

And what do you do in your job to earn the extra $50k?


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## dave4374 (Jul 20, 2019)

The sale and purchase doesn't close until Aug 15th..however..all conditions etc have been signed off on from both ends...so I am not worrying that anything bad will happen between now and then (lol or should I be).


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## Mukhang pera (Feb 26, 2016)

kcowan said:


> And what do you do in your job to earn the extra $50k?


I am guessing he's in admin and she's in the classroom. But he could also be a university prof or...lots of possibilities.



dave4374 said:


> We also have three young kids and daycare costs of about 1000k a month..
> 
> My question to the online professionals reading this post....are we screwed?


Daycare costs of 1000k a month would be enough to make what little hair I have left stand on end. That works out to a cool million.

I am a bit surprised to see two apparently well-educated and reasonably well-placed individuals asking the original question. Of course they are not "screwed". They might be taking on somewhat more debt than in the past, but hardly enough to bring the wolf to the door. Moreover, it's reasonable to assume that, over time, their incomes will rise, their monthly mortgage payment remain static and the weight of the debt will diminish.


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## Mukhang pera (Feb 26, 2016)

With respect to recommendations for insurance, most that I know even remotely connected with "the teaching profession" have employer-funded disability plans with excellent benefits and group life insurance wholly or partly employer-funded, with death benefits set in the range of 2-3 times annual salary. Buying more term insurance might be worth looking at but then, another bill to pay. Not something I have ever done.


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## AltaRed (Jun 8, 2009)

Mukhang pera said:


> With respect to recommendations for insurance, most that I know even remotely connected with "the teaching profession" have employer-funded disability plans with excellent benefits and group life insurance wholly or partly employer-funded, with death benefits set in the range of 2-3 times annual salary. Buying more term insurance might be worth looking at but then, another bill to pay. Not something I have ever done.


I agree their group work plans would/should be healthy amounts, but the term life of each (even if 2-3 times) isn't going to cover the full mortgage. But then, is that not a 'nice to have' rather than a must on full coverage? Term life that would write off about half the mortgage is not a bad place to be. People can over-insure and it shouldn't be necessary with both individuals being professional educators.

MP, you obviously haven't had to pay for day care for a long time. https://www.todaysparent.com/kids/daycare/most-expensive-daycare-canada-city-2018/ It is mind boggling. If one has 3 children per chance, it is almost more effective having a full time nanny in many places. Clearly not $1000k though


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## Mukhang pera (Feb 26, 2016)

AltaRed said:


> MP, you obviously haven't had to pay for day care for a long time. https://www.todaysparent.com/kids/daycare/most-expensive-daycare-canada-city-2018/ It is mind boggling. If one has 3 children per chance, it is almost more effective having a full time nanny in many places. Clearly not $1000k though


I have never paid for daycare. When our child was at that age, he had a parent in the home full-time. 

But when I referred to $1000k, I was focussing, in jest, on what I took to be misstatement. To me, $10k is ten thousand. $100k is one hundred thousand and $1000k is a thousand thousand or, in other words, one million. One million dollars a month for daycare seems excessive.


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## AltaRed (Jun 8, 2009)

Indeed. A mis-spoke for sure.


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## dave4374 (Jul 20, 2019)

day care costs are crazy...we have three kids and one is preschool @800 a month the other two are before and after school at around 1200k a month. With the move we are utilizing a nanny so our new total cost for year 1 is only 1000$ total and in year two it drops to 400$.


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## AltaRed (Jun 8, 2009)

dave4374 said:


> day care costs are crazy...we have three kids and one is preschool @800 a month the other two are before and after school at around 1200k a month. With the move we are utilizing a nanny so our new total cost for year 1 is only 1000$ total and in year two it drops to 400$.


Did you not butcher the math yet again? First it was $1000k ($1 million) per month, and now you suggest $1000 for a full year?


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## dave4374 (Jul 20, 2019)

AltaRed said:


> Did you not butcher the math yet again? First it was $1000k ($1 million) per month, and now you suggest $1000 for a full year?


Sorry I don't understand your response?

Maybe I made a mistake somewhere in my post so I can re-explain:

under our current situation we spend: roughly 2,100$ a month for daycare...when we move we will only spending roughly $1,000 a month and then the second year our costs drop to roughly $300 or $400 a month.

Hope that clears up any confusion and thanks again for all the great insight


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## AltaRed (Jun 8, 2009)

It is clear now. Think we knew what you meant but that was not what you said previously.


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## lonewolf :) (Sep 13, 2016)

Just a Guy said:


> Remember too, there are no limits on how much you can earn from passive income, unlike a job which is limited by your time.


 Everything in the universe is in limited supply. That which is in limited supply it is best to use wisely


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## lonewolf :) (Sep 13, 2016)

dave4374 said:


> Hi,
> 
> I was looking to get some advice...My partner and I just purchased what we thought was our dream home but since signing the deal we have been sleepless and stressed.
> 
> ...


 For most the more they make the deeper in debt they are. The golden rule of money is simple spend less then you make. You broke the golden rule so yes you did make a mistake.


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## Just a Guy (Mar 27, 2012)

I prefer the rule, make more than you spend. There is a subtle, but big difference.


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## dave4374 (Jul 20, 2019)

lonewolf :) said:


> For most the more they make the deeper in debt they are. The golden rule of money is simple spend less then you make. You broke the golden rule so yes you did make a mistake.



Im still running at minimum (not including wage increases, etc) a 4k surplus every month...maybe you are seeing something I am and others are not...appreciate any insight you have.


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## Just a Guy (Mar 27, 2012)

Some people fear debt, any debt. They don’t realize debt is a tool, neither good or bad. It all depends on how it’s used. Done right it can build you a fortune, used carelessly and it can kill you.


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## lonewolf :) (Sep 13, 2016)

Just a Guy said:


> Some people fear debt, any debt. They don’t realize debt is a tool, neither good or bad. It all depends on how it’s used. Done right it can build you a fortune, used carelessly and it can kill you.


 Guy you use debt wisely you buy assets that put money into your pocket. The OP used debt to purchase a liability that takes money out of his pocket. A house can be either a liability that takes money out of your pocket or an asset that puts money into your pocket. Have more assets then liabilities is another golden rule.

Assets: put money in your pocket

Liability: Takes money out of your pocket


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## prisoner24601 (May 27, 2018)

One way to sleep better (or worse) would be to stress test your new situation and see what that does to your monthly free cash flow:
Mortgage interest rate seems very low and could be higher for balance of loan. Maybe as much as another 1,000/month or more?
Property tax hike, new roof, saving for new car, savings for kids in Uni, savings for retirement, etc..

If you really have 4,000 of free cash flow (40% of your net income) each month going to savings and/or debt repayment then it seems reasonable if owning a nice house is your main financial goal.

My advice would be to try and dump as much of your free cash flow into debt repayment and bring down mortgage quickly. That way you have options in say 10 years when other needs/wants crop up.


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## dave4374 (Jul 20, 2019)

prisoner24601 said:


> One way to sleep better (or worse) would be to stress test your new situation and see what that does to your monthly free cash flow:
> Mortgage interest rate seems very low and could be higher for balance of loan. Maybe as much as another 1,000/month or more?
> Property tax hike, new roof, saving for new car, savings for kids in Uni, savings for retirement, etc..
> 
> ...


We do have those numbers and are already pre-approved and passed the stress test.

My concern is/was that we spent too much or are way above the norm in terms of payments..it seems that is not the case.

thanks for the insight


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## dave4374 (Jul 20, 2019)

we used a similar approach when we bought our current house and it doubled in value making us a pretty good return....the plan with this house is/was to sell in 15ish years and hopefully do well and downsize...there are other factors too like loving the area etc, etc as well


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## Mortgage u/w (Feb 6, 2014)

I went through the same anxiety. What got me over it is telling myself that if things didn’t work out, I would have just sold and started over. 

It takes a few months to adjust yourself to the financials. You will quickly see that you have control of the situation and it’ll be alright. 

As your friends and mortgage specialists said, you have a very good debt to equity ratio when compared to the average homeowner.


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## dave4374 (Jul 20, 2019)

Mortgage u/w said:


> I went through the same anxiety. What got me over it is telling myself that if things didn’t work out, I would have just sold and started over.
> 
> It takes a few months to adjust yourself to the financials. You will quickly see that you have control of the situation and it’ll be alright.
> 
> As your friends and mortgage specialists said, you have a very good debt to equity ratio when compared to the average homeowner.


thank you very much the unbiased opinions are greatly appreciated are have really helped with the nerves.....it is crazy the tricks a persons mind will play when nervous, etc...so it is good to hear from strangers that we haven't done anything to out there


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## Just a Guy (Mar 27, 2012)

lonewolf :) said:


> Guy you use debt wisely you buy assets that put money into your pocket. The OP used debt to purchase a liability that takes money out of his pocket. A house can be either a liability that takes money out of your pocket or an asset that puts money into your pocket. Have more assets then liabilities is another golden rule.
> 
> Assets: put money in your pocket
> 
> Liability: Takes money out of your pocket


This is true, and something I tend to live by. That being said, you probably don’t have to be a slave to it. In the OP’s case, I’d be more concerned over what he does with the extra $4k he gets each month.

Sure his house is a liability, but he makes more than enough extra each month, properly invested, to buy assets which will offset the liabilities. He doesn’t seem the type to buy a bunch of toys yet, at this point, also doesn’t have the knowledge to buy proper assets. He’s a product, in more ways than one, of our education system. 

Very few people can figure out ways to have their homes become assets that generate cash flow. I was able to (by running a business off of it) but it’s not easy the way the system works. A home mortgage is a forced savings plan for most people, usually their only one. So I cut some slack when it comes to buying that liability.


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## dave4374 (Jul 20, 2019)

Just a Guy said:


> This is true, and something I tend to live by. That being said, you probably don’t have to be a slave to it. In the OP’s case, I’d be more concerned over what he does with the extra $4k he gets each month.
> 
> Sure his house is a liability, but he makes more than enough extra each month, properly invested, to buy assets which will offset the liabilities. He doesn’t seem the type to buy a bunch of toys yet, at this point, also doesn’t have the knowledge to buy proper assets. He’s a product, in more ways than one, of our education system.
> 
> Very few people can figure out ways to have their homes become assets that generate cash flow. I was able to (by running a business off of it) but it’s not easy the way the system works. A home mortgage is a forced savings plan for most people, usually their only one. So I cut some slack when it comes to buying that liability.


Excellent points...depending on the money left at the end of the month I will allocate some to each kids resp's and our TFSA. If after living in the home for a bit and there are no surprises I will use my line of credit to probably purchase a small rental property. I have done this before and it provided some great returns; however, given the stress we are under with our current project we need some time to reset. I will also add..the homes we had prior to having kids we always rented out a room or the basement to generate passive income and it worked amazing, so I agree with the point you had made in earlier posts and would encourage others to do that as well.


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## Just a Guy (Mar 27, 2012)

I wouldn’t rent rooms in my house, especially when I have kids.


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## dave4374 (Jul 20, 2019)

no we did his pre kids...I wouldnt advice renting out space in your house if you have kids


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## peterk (May 16, 2010)

Sounds like you are still making RRSP/TFSA contributions, and even RESP contributions, and still have free cash flow after all that?

For some perpsective, most people with young families would consider retirement savings an unobtainable goal, and RESP contributions pure fantasy, all with smaller mortgage payments than yours. I think things will turn out fine with your current plan.


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## dave4374 (Jul 20, 2019)

peterk said:


> Sounds like you are still making RRSP/TFSA contributions, and even RESP contributions, and still have free cash flow after all that?
> 
> For some perpsective, most people with young families would consider retirement savings an unobtainable goal, and RESP contributions pure fantasy, all with smaller mortgage payments than yours. I think things will turn out fine with your current plan.


thanks..im not asking to troll other people...only to get unbiased perspective as we were/are feeling as though we increased our costs way too much


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## Just a Guy (Mar 27, 2012)

One fallacy which seem to be implied here is you need to invest a lot of money to make money. If you have a good strategy, you can get excellent returns. Sure it’s not the norm, but if you don’t do what the lemmings do (well balanced portfolio of stocks and bonds in a “diversified” portfolio), you have a chance at making some good returns. You May not hit a grand slam home run, but consistently hitting a fair number of doubles isn’t all that hard.

Investing is about time, not money.


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## nobleea (Oct 11, 2013)

I don't see a problem with your plan. We make almost the exact same amount, mortgage close to the same, house value, 3 kids, etc. Our day care costs will be more but ours are all preschool. My wife is also a teacher. We've never felt worried about the mortgage value or making the payments. And that's with 2 maternity leaves since we moved in to the house 3 years ago.

A couple points to consider: Life insurance. We have decent plans through work. I think it's 2x salary, plus another 2x in the event of an accidental death. But I assumed that it wouldn't be accidental. And then looking at if one of us passed, extra day care and help around the house would be needed, plus all of it on a smaller salary. So we have extra term insurance on me, and joint term on both of us.

Salary risk. I assume that you are both elementary or secondary teachers (ie not post secondary). Being in the same profession, I think your biggest risk is a strike or lockout. And that is more likely in your province (and mine) than it was 2 years ago. Of course you'd get strike pay, but that's not going to cover things. How long could you go without your regular salaries? Making what you do, you're probably higher up on the salary grid, which means you have the experience necessary to avoid layoffs/cuts if/when they ever happen. But strikes affect everyone. They're rare, but could be disastrous to a two-teacher family. Just have enough emergency savings available to cover the eventuality.


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## sags (May 15, 2010)

I can"t help but think if the OP can't make it work with their financial situation, there is little hope for anyone else.


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## peterk (May 16, 2010)

dave4374 said:


> thanks..im not asking to troll other people...only to get unbiased perspective as we were/are feeling as though we increased our costs way too much


No I didn't mean it like that. Just that TFSA and RESP savings are rather "luxury"-type savings. If you can still make contributions while paying your large mortgage, the obvious solution, if you should lose a job or something, would be to stop paying money into those savings accounts and pay your mortgage instead. Maybe even take money out of those accounts. Not the end of the world.


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## lonewolf :) (Sep 13, 2016)

sags said:


> I can"t help but think if the OP can't make it work with their financial situation, there is little hope for anyone else.


 All it takes is to spend a nickle a day more then you earn to cause stress in your life


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## AltaRed (Jun 8, 2009)

Am at a loss to understanding the discussion about debt, i.e. the higher mortgage obligation. It is well within the capacity of the OP and spouse to manage with some $4k/month of 'surplus' purchasing power post-fixed costs. Enough to cover almost anything, including TFSA and RESP contributions (I am assuming no RRSP contribution room due to DB pension plan contributions), and having a 6 month emergency fund buffer (TFSA assets could serve as that) to bridge any strike/lockout, near term health issue.


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## jessoha (Jul 23, 2019)

AltaRed said:


> Am at a loss to understanding the discussion about debt, i.e. the higher mortgage obligation. It is well within the capacity of the OP and spouse to manage with some $4k/month of 'surplus' purchasing power post-fixed costs. Enough to cover almost anything, including TFSA and RESP contributions (I am assuming no RRSP contribution room due to DB pension plan contributions), and having a 6 month emergency fund buffer (TFSA assets could serve as that) to bridge any strike/lockout, near term health issue.


I can really relate to this thread. i just purchased a home and feel very simliar...I am very stressed right now that mpa is going tp reassess my house at the purchase price which is double the assessment. I kinda feel as though I made an emotional decision as well and bought a house for more than I should have. I find myself looking at much cheaper home looking to sell the house I haven't even moved into for many of the reasons that you also post. 

Looking at the math you have posted I have a payment of 2100$ including taxes but my take net income is only $5200. I was not concerned when I bought but am starting to now and even more so thinking about the possibility of a huge jump in taxes. 


wondering what the thoughts are???screwed?


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## AltaRed (Jun 8, 2009)

There is no doubt that increased mortgage payments will give most a 'sinking' feeling in that it is hard to do with less free cash flow than one is used too. It comes down to budgeting and sharpening the pencil to see where things can be cut so that there is truly 'totally free' cash flow available each month. 

Example: My first house really strapped us back in '74 to get into the market, carrying both a 1st and 2nd mortgage. Paid off that 2nd mortgage quickly but over the course of the next 20+ years bought 5+ more houses as a result of corporate moves taking the opportunity to move up each time BUT never biting off more cash flow than we could be comfortable with. Indeed, the last 2 'upgraded' houses were purchased for cash.

I know that is just an anecdote and is highly situational for each individual, but the key was (other than that first stretch in '74) to not bite off more than one can chew, including the ability to use accelerated payments to pay down principal. It should not be that hard to do if one is truly being very efficient in their spending. Examples: buying food from bulk barn, getting some consumables from the dollar store, going to value village for used clothing at least for young children, getting all children's toys and books from value village or garage sales (my kids had all the good Fisher Price stuff but not one item was bought new), buying used vehicles, cheap Tuesday movie nights, etc, etc. And we took vacations, getting camping gear and camping rather than using resorts and hotels. We and the kids never felt deprived during those 15 years or so of getting established. No one needs $100/mo worth of cable channels, a 3GB smartphone contract, etc, etc. 

IOW, it is not that hard to drill down into the budget to get rid of unnecessary expenditures to handle the increased costs of a larger home (with increased utilities and taxes) provided one has not reached too far, and provided one has the flexibility to make their TFSA contributions and accelerated mortgage payments.

A payment of $2100 PIT on a net of $5200 leaves almost $3k for all the other needs. Unless one has gotten themselves dug in with credit card balances and auto loan payments, $3k cash flow sounds like pretty reasonable to cover monthly expenses for a couple, or small family. And if you have an auto loan.....why do you?


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## Just a Guy (Mar 27, 2012)

jessoha said:


> I can really relate to this thread. i just purchased a home and feel very simliar...I am very stressed right now that mpa is going tp reassess my house at the purchase price which is double the assessment. I kinda feel as though I made an emotional decision as well and bought a house for more than I should have. I find myself looking at much cheaper home looking to sell the house I haven't even moved into for many of the reasons that you also post.
> 
> Looking at the math you have posted I have a payment of 2100$ including taxes but my take net income is only $5200. I was not concerned when I bought but am starting to now and even more so thinking about the possibility of a huge jump in taxes.
> 
> ...


People are resilient, you’ll survive and adapt to the point where you won’t even notice it after a while. Relax and try to enjoy life instead of stressing about decisions that have already been made. 

If you want, start educating yourself in passive income, something our society rarely uses and you’ll soon discover ways to increase your income without a lot of work. It’s not a get rich quick scheme, but it will grow eventually.


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## AltaRed (Jun 8, 2009)

Just a Guy said:


> People are resilient, you’ll survive and adapt to the point where you won’t even notice it after a while. Relax and try to enjoy life instead of stressing about decisions that have already been made.


A good summation that I was trying to articulate above. You will adapt in X months to what you have left, e.g. a reasonable ~$3k per month, and won't regret it.


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## jessoha (Jul 23, 2019)

AltaRed said:


> A good summation that I was trying to articulate above. You will adapt in X months to what you have left, e.g. a reasonable ~$3k per month, and won't regret it.


ya i feel like i am cutting it a bit close with 2 kids. My plan is to move in and see what happens...if after 2 years we are just getting by we will just move to a less expensive home..I figured I would receive roughly a 4% return each year so hopefully i wont lose too much. i just dont want to be stressed 24.7 about money and living on a line of credit.


also the 3k a month doesnt include kid expenses..heat/hydro/food/life...so i have to be watchful....i think


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## AltaRed (Jun 8, 2009)

jessoha said:


> also the 3k a month doesnt include kid expenses..heat/hydro/food/life...so i have to be watchful....i think


I agree that is cutting it quite thin with 2 kids, but moving in a short time period is also very costly. Real estate fees, land transfer taxes, moving costs. So I'd try to avoid it if possible short of incurring consumer debt of any kind (that is a vicious circle).


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## jessoha (Jul 23, 2019)

AltaRed said:


> I agree that is cutting it quite thin with 2 kids, but moving in a short time period is also very costly. Real estate fees, land transfer taxes, moving costs. So I'd try to avoid it if possible short of incurring consumer debt of any kind (that is a vicious circle).


agree with everything you are saying...it is very difficult to budget for kids sports and so hard to say no when they want to do something...hopefully it all works out (well it kinda has to) or we move again and I feel like an awful mom.


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## jessoha (Jul 23, 2019)

AltaRed said:


> I agree that is cutting it quite thin with 2 kids, but moving in a short time period is also very costly. Real estate fees, land transfer taxes, moving costs. So I'd try to avoid it if possible short of incurring consumer debt of any kind (that is a vicious circle).


OP had only 4k after mortgage and taxes with three kids and everyone thinks he will be fine.


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## Just a Guy (Mar 27, 2012)

If it makes anyone feel better, I survived several years with no steady income and 4 kids.


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## dadaswell (Jan 6, 2016)

Just a Guy said:


> Here’s something to get your mind off things.
> 
> In our house, we never look at problems, we always look for solutions. If you focus on a problem, that’s all you see and you get paralyzed, whereas many solutions exist and there are opportunities to resolve the problem.
> 
> ...


Very, very good advice...for anything!!!


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## AltaRed (Jun 8, 2009)

jessoha said:


> OP had only 4k after mortgage and taxes with three kids and everyone thinks he will be fine.


Go back and do the math from the first 2 posts of the thread. The ~$k was after utilities and food, and thus theoretically for mostly discretionary purchases although the OP did disclose some extended family obligations, etc. further into the thread.


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## lonewolf :) (Sep 13, 2016)

jessoha said:


> agree with everything you are saying...it is very difficult to budget for kids sports and so hard to say no when they want to do something...hopefully it all works out (well it kinda has to) or we move again and I feel like an awful mom.


 The adults are making kids sports expensive by doing all the organizing. When I was a kid we the kids got together & found ways to play sports & games for the most part free without the involvement of adults.


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## sags (May 15, 2010)

lonewolf :) said:


> The adults are making kids sports expensive by doing all the organizing. When I was a kid we the kids got together & found ways to play sports & games for the most part free without the involvement of adults.


Parents can't let the kids out of their sight these days. Too many wackos driving around looking for kids. Hardly a week goes by the police aren't telling parents to be on the lookout.

I have a friend who works and she was having her mom come over to babysit. They live in a complex of condo townhouses and the mom let the kids play on the front lawn and watched them through the kitchen window. The police arrived and wanted to know why the kids were "unattended". The Children's Aid got involved and questioned the parenting skills.

It isn't surprising parents won't let their kids out to play like they used to.


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## Just a Guy (Mar 27, 2012)

You should just stay inside, it may solve the problem.


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## jessoha (Jul 23, 2019)

AltaRed said:


> There is no doubt that increased mortgage payments will give most a 'sinking' feeling in that it is hard to do with less free cash flow than one is used too. It comes down to budgeting and sharpening the pencil to see where things can be cut so that there is truly 'totally free' cash flow available each month.
> 
> Example: My first house really strapped us back in '74 to get into the market, carrying both a 1st and 2nd mortgage. Paid off that 2nd mortgage quickly but over the course of the next 20+ years bought 5+ more houses as a result of corporate moves taking the opportunity to move up each time BUT never biting off more cash flow than we could be comfortable with. Indeed, the last 2 'upgraded' houses were purchased for cash.
> 
> ...



My expenses are pretty low..i dont spend $ on crazy things...I do have an older car that will need to be replaced in the net 5 years...hopefully longer..Guess it is just the feeling of the unknown


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## jessoha (Jul 23, 2019)

AltaRed said:


> Go back and do the math from the first 2 posts of the thread. The ~$k was after utilities and food, and thus theoretically for mostly discretionary purchases although the OP did disclose some extended family obligations, etc. further into the thread.


I went back and looked and he posted 4k left over after mortgage and taxes and he has 3 kids.


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## AltaRed (Jun 8, 2009)

jessoha said:


> My expenses are pretty low..i dont spend $ on crazy things...I do have an older car that will need to be replaced in the net 5 years...hopefully longer..Guess it is just the feeling of the unknown


Most of us have been there. With a family, it is perfectly normal to feel just a bit vulnerable or uncomfortable, especially if one is somewhat conservative in their risk tolerance and feel better with a comfortable cash cushion. I know people who 5 years later wished they had bought 'more' of a house, or added a few extras, and I know others who are still bootstrapped with the mortgage noose around their necks because they reached too far. I think the key is in believing the free cash flow left after PIT will not likely require one to incur any consumer debt. That slippery slope can be lethal.


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## AltaRed (Jun 8, 2009)

jessoha said:


> I went back and looked and he posted 4k left over after mortgage and taxes and he has 3 kids.


I really don't want to drag this on, but here is the data from post #1


> Our monthly mortgage payment will be 2700...when you add property taxes (assuming we dont get reassessed huge) adds another 620$ a month so 3320$
> 
> Extra expenses in the home are little more but nothing to crazy so it is kinda a wash in that regard.
> 
> ...


My math says monthly expenses including PIT and daycare is $4320/mo changing to $3620/mo in a year. With a take home pay of $10/month, net cash flow is about $6k now and will be $6.3k in a year's time. How did you get $4k? 

Perhaps from my next post #2 where I said, add in $1500 for utilities and food, and then call it $4k cash flow conservatively? Without any other 'base cost' obligations, $4k/mo is quite doable for a family of 5 for clothing, health, school, entertainment, camping vacation, auto gas/insurance/repair, etc. albeit the OP did say later he had some other extended family obligations.


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## jessoha (Jul 23, 2019)

AltaRed said:


> I really don't want to drag this on, but here is the data from post #1
> 
> My math says monthly expenses including PIT and daycare is $4320/mo changing to $3620/mo in a year. With a take home pay of $10/month, net cash flow is about $6k now and will be $6.3k in a year's time. How did you get $4k?
> 
> Perhaps from my next post #2 where I said, add in $1500 for utilities and food, and then call it $4k cash flow conservatively? Without any other 'base cost' obligations, $4k/mo is quite doable for a family of 5 for clothing, health, school, entertainment, camping vacation, auto gas/insurance/repair, etc. albeit the OP did say later he had some other extended family obligations.


sorry you are correct...it is long thread..and math isn't my strongest subject.


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