Give Me Back My Five Bucks

We are homeowners!

I honestly cannot believe how fast the last two years have flown by. Life has changed so much, and back in the summer of 2015, I never would have guessed that I’d meet someone as amazing as RD, and that we’d be settling down and planning the rest of our lives together.

Before we decided we wanted to buy a home, we spent a few months going through all the possible scenarios that life could throw our way in the next 10-15 years. We thought about where we wanted to live, what kind of space we wanted, what our lives would look like, and whether we wanted kids or a pet (or maybe both). In the end, we agreed that Vancouver is where we’ll be until we retire. And because of that, we decided to make home ownership a goal with the idea that whatever we end up buying, we’ll be living there for the long-term.

I know, buying real estate in Vancouver in 2017 is crazy, right? Maybe, yeah. But we have good jobs and a nice amount of money saved, and we are both level-headed enough to not buy anything out of our comfort level. So even though we were pre-approved for a mortgage of about $850,000, we set a top end budget of $475,000.

Location

We didn’t struggle at all on where we wanted to live. I’ve always been in love with New Westminster (where I owned my townhouse, and also where I rented an apartment years earlier). It’s just got a strong community vibe, and since our budget wasn’t going to buy us a 2-bedroom home where we currently live in Mount Pleasant (that would have cost us about $800,000), it was the obvious choice. Especially considering my commute would only increase by 10 min., and RD’s commute actually gets shorter.

The Search

We targeted a very specific area in New Westminster and started our home search by getting pre-approved for a mortgage in early March. We wanted to have our finances sorted out just in case something amazing came onto the market. Weeks went by. We saw a lot of bidding wars, condos that regularly went for $100,000 over asking … and we went to a lot of open houses, but most places just didn’t suit us for one reason or another. It’s not that we were being overly picky, we just knew exactly what we wanted.

Related: Thoughts on our open house tour

One day we went to view a 2 bed/2 bath condo in a high rise building. It had a great layout, floor-to-ceiling windows, and an amazing view from the gigantic balcony – but we’d have to do work just to move in (replace carpet, fix doors, etc), and that would have taken us over our budget. So we reluctantly passed. The following week, we saw another unit just a few floors down which required no updating, and the views were just as stunning. But that price point was at the very top of our self-imposed budget, and we just assumed everything was going to sell over asking (like all the other condos we had viewed). So we left the open house and didn’t consider it a contender.

The next week, I noticed the listing was still online, so I messaged my Realtor and asked if it was still available – and to our surprise, it was! So we snuck in a low ball offer, and after a bit of negotiating, we ended up getting it for about $10,000 less than list price.

The Financials

We had a $125,000 down payment, and decided to use $115,000 towards the home, holding back $10,000 for closing and moving costs. So no, we didn’t end up meeting our original goal of $150,000 towards a home, but I really feel pleased with the amount we were able to save.

Our purchase price was $468,000. And after the down payment, our mortgage will be $353,000.

The mortgage amount represents 2.2x our combined gross annual salary, and all housing expenses come out to 23% of our combined net monthly income – this is based on our full-time jobs alone. Even though I have consistently made a nice chunk of freelance income every year, we decided to only get pre-approval (and create a budget) based on our secure income.

Related: My biggest home buying regret – not considering the future

And what kind of PF blogger would I be if I didn’t include a mock budget? :) This time the chart below indicates our joint household expenses, and what we expect to put into our joint account every pay cheque. We’ve also built in a nice buffer each month which will serve as our household savings fund for emergencies and future large household expenses.

We pay $1,650/month for rent right now, and as you can see our base housing costs (mortgage/strata/property tax) is $2,045/month. While normally I would scoff at such a big increase to our living expenses, we are both absolutely ok with it because we knew we were going to move eventually (and that it would cost us more money), but also::

  • We can still comfortably pursue our financial goals of early retirement and travelling every year.
  • 2-bedroom apartments cost on average $2,500/month to rent in Vancouver, and about $2,000 in New Westminster (units for rent in our building are going for $2,200+).
  • We will be able to sell RD’s car and go down to a one-car household.
  • The building has a nice gym (eliminating the need to continue to pay drop-in fees at the rec centre).
  • Crazy amount of natural light and a large patio (our current home has zero outdoor space and very minimal natural light).
  • A little more space (we’re going from 680 sq.ft. to 825 sq.ft.).
  • A usable second bedroom for guests, and RD can have a small art area.
  • The ability to have a small garden on the patio.
  • Pet-friendly, so we can finally get a cat.

Even though we have decided to buy a home, I am (and will always be) a fan of renting. For some, owning in Vancouver will never be an option, and there’s nothing wrong with that. What’s the point of stretching yourself to the limit just to buy a home? Renting is a fantastic choice for many people, because owning a home only makes sense if 1) your monthly housing expenses are on par with renting, 2) you’ve decided to settle down in one place for the long term, and 3) you aren’t stretching yourself to the point where your lifestyle and retirement savings are compromised.

Related: When renting is better than home ownership

We don’t take possession until mid-June when RD comes back from his annual 5-week field work trip, and we’ll officially be moved in by the end of June. But there’s a lot to do in the meantime! I’ll need to get quotes from painters and movers, change over our insurance, update addresses, as well as start to sort through our stuff for selling or donating.

Anyway, there you have it! I’m surprised but happy that we bought a home so quickly, and we are both looking forward to settling into our new home. :)

May 2017 Goals

Well May is a difficult month because RD is gone and I already miss him, but I have a lot of fun things planned – and work is going to be super busy, so I’m looking forward to picking up a lot of OT hours to help pay for all the travel we have left in the year. :)

This coming weekend I’m headed to Seattle for a girls trip with one of my best friends. We’re splurging a bit and taking a cruise ship from Vancouver to Seattle for one night. :) We’ll then stay another night in the city and catch a Mariners game. I’m excited for this trip because we used to travel a lot together, but she had a daughter now, and understandably it’s much harder for her to get away.

I’m also headed home for the May long weekend to take my sister out for her birthday. I booked us a session at the Float House, as well as a massage afterwards. It’ll be pricey, but I’ll be able to claim my massage through benefits, so it’ll be less expensive than last year’s birthday trip to the spa. :) I’ll also get to see some friends that I haven’t seen since Christmas, so I’m really looking forward to that.

News

I mentioned in my April goals review that I got a raise. It’s not a huge bump, but every bit counts, and it does increase my net income by about $220/month which definitely affects my budget. I’m mostly really happy that my  hard work was acknowledged! After thinking it over, $75 of that will be saved for retirement, $100 will go towards general savings, and the rest will be eaten up by lifestyle inflation because this fall we are getting a cat. :)

The second bit of news is that RD and I have bought a condo. We were both really surprised that we found something in just a few months of looking. But it was exactly what we were looking for, and came in under our budget so we’re pleased. We don’t take possession until mid-June, so May’s budget is not affected. I have a big post scheduled for Monday that will run through the details, so stay tuned for that.

Here is my proposed budget for May:

May 2017 Goals:

  • Exercise. I bought a one-month pass to YYoga on Monday because it was on sale, but it was still expensive! I went to YYoga last May when they were having a sale on passes, and I loved it because they offer both spin and yoga classes. It was a nice break from the climbing gym, and helped me get my cardio up for the hiking season. I can’t justify a studio pass AND a climbing membership for the year, so this is my one month to get as much yoga and spin in as I can. :)
  • Organize our move. When RD and I moved into our little laneway house 1.5 years ago, he did all of the legwork because I was in Toronto doing some freelancing. So now that the roles are reversed, I have a lot to organize. I’ll need to get quotes from movers and painters (to see if it’s even feasible that we hire them), organize move-in times with the building, look into getting strata approval to do a quick renovation, and start to pack up our home with the things I know we’ll be taking with us.
  • Refresh GMBMFB. I’ve been wanting to do this all freaking year, but this is going to be the month to do it.

April 2017 Goals: Recap

April was expensive, but I ended up coming under budget because we decided to use our credit card rewards points to offset some of the cost of our Portugal trip, and I booked cheaper tickets to the Blue Jays games. The prices of the good seats were just outrageous, especially with the exchange rate, and all the seats at Safeco Field have a great view anyway.

We started organizing and setting aside items for donation and to sell, which feels really nice – but the place looks like a bomb went off. And now that RD is off on his annual 5-week trip for work, I’ll have a pretty busy May trying to sort through and sell what we no longer need. 

In work-related news, I might have mentioned before that my boss has taken the next 3-months off to go on an epic around-the-world adventure with her partner. I’m so thrilled that she’s on such an amazing trip, and I’m also very happy that the company I work for is flexible and allows for life events like that. While she’s gone, I’ll be working a lot more overtime because I’m taking on some of her workload. But I’m more than happy to do it. And the extra hours means more banked vacation time. :)

I also got a raise a few weeks ago, which will allow me to increase my retirement contributions. I haven’t figured out exactly how much I’ll be increasing it by, but will have the numbers in my May Budget post later this week.

Anyway, here’s how I did this month:

Over Budget:

  • Utilities – The amount we were billed was for March and April. It’s been chilly the past 2 months, and we used our heat more than I thought we would. We’ve since turned the thermostats all the way down, so I don’t anticipate the next two months to be very expensive.
  • Food – We fell out of sync with our normal grocery shopping routine near the end of the month when we were both preparing to go away but didn’t want any leftovers in the fridge.
  • Household – RD ended up buying some plastic totes because they’re more durable for storing stuff in the garage. I’m glad he did because our stuff is just sitting on the floor in cardboard boxes.

Income and Savings:

I only made a few hundred dollars in freelance income for the month, but am in negotiations for two or three projects in May. I also have a cheque from the conference that I spoke at this last weekend, but will group that in with my May income.

  • Current Down Payment Fund: $133,650 / $150,000 (+ $500)

April 2017 Goals:

  • Be openCHECK! I’m introverted, so public speaking can be difficult for me. Actually, even a lot of social interaction is difficult. Thankfully I’m able to overcome it most of the time, and perform in a way where people might not know how scared/nervous I actually am. I felt like when I was at the conference (more so talking one-on-one with people and not during my talk), I was able to be authentic and show my true self. And that’s all I really wanted. :)
  • Be budget consciousCHECK! I tried really hard to watch my budget this month, and because of that (and some rewards points), I was able to save $500 to my down payment fund, in addition to my regular automated retirement contributions.
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