# Relocation Package w/ employer



## deadwing (Mar 3, 2012)

Hi All,

I have been creeping these forums for a bit taking some inspiration from money diaries specifically. I am 26 years old and am starting to feel like I need to make a stronger effort in my financial decisions to secure myself for later in life rather than get caught up in a life of consumerism and debt which seems to haunt a majority of the population. 

Here is my situation:

My company has requested that I relocate for work (2 hours away) from Toronto to Kingston area. This move will result in a better quality of life for me as I do not like Toronto or commuting there from the burbs. 

I currently have a home that would be able to market for 250-255k with a mortgage of 197k. This mortgage is in it's second year of a 5yr term @ 3.89%. 
Last weekend I purchased a home in Kingston area for 315k (the house has everything I need and as long as I am in Kingston, there is no need for me to ever leave this location so I justified spending a little more).

My employer has offered me the following for the move:
1) 100% financing on the new home @ 2% for 2 years based on 25 yr amortization
2) No restrictions on pre-payments
3) No penalty when I transfer my mortgage to another broker at 2 yr
4) All closing costs/legal fees involved with the purchase of the new home and all moving expenses not to exceed 20k.
5) All closing costs/legal fees/commission of sale of the existing property is not covered by my employer.

My current mortgage has a $5800 penalty if I were to terminate and I presume I would also lose the $3000 mortgage insurance I purchased during the process. 

Between my fiance and I we earn 105k per annum. 

Calculations:

[email protected]% after 2 years 
Interest paid = 12,175.39
Amount owing = 292,161.04

[email protected]% after 2 years (assuming I sell my current home and get 45000k equity to put into the house in Kingston)
Interest paid = 20,327.38
Amount owing = 253,467.13

My questions are these:

1) Would you sell the current house and go with the 2 year mortgage through your employer?
2) Would you consider keeping your current house (townhouse) and rent it out to further your equity? 
3) Would you transfer your existing mortgage and leave the company out of it?
4) Am I overlooking any costs that could come up in these transactions ie. fees when I transfer my company mortgage to another lender - or would this fee be built into whatever rate they were offering in 2 years time?
5) I have also considered selling my current house and transferring to a rental property but I think the cost of closing costs and legal fees on both ends is too much for me at this stage.

If you made it this far, I look forward to your opinion. Thank you, I appreciate it.


----------



## Mall Guy (Sep 14, 2011)

Does this mean you could potentially be paying two mortgages at once ? Also, the company I work for offers a $1000 "curtain allowance" meaning you can claim this amount for the little things that add up, without receipts.


----------



## deadwing (Mar 3, 2012)

Yes, there is potential for that. My company has given me the option to bridge the mortgage for a couple months so I don't have any issues with cashflow ie. 2 mortgages at once.

After a lot of number crunching today I believe my best move going forward is to hold on to my current house and rent. Over the next 1-2 weeks I will get an idea of what kind of renters I can get for a 3 bedroom townhouse. It is a little bit riskier given tenants are hit and miss however I think that risk outweighs the losses I would incur in commission/legal fees to close this property after only 1.5 years of owning it. My fingers are crossed...


----------



## Mall Guy (Sep 14, 2011)

In the past I had potential tenants fill out a rental application, a credit check and then finally a lease. Only advertised on Kijiji, and only with email contact information. This cut down on the tire kickers, as I only responded to those who looked promising. Good luck with your move!


----------

