Monday, January 15, 2007

Average income = average house???

My wife and I are average in a lot of ways. We have 2 cars, we want 2.4 children, we're average in size. There isn't much out of the ordinary with us. Income wise, we're above average. We are both quasi professionals, so together we make about 20 - 30k above the average family income. We have no children yet, so we are doing alright. However, we have also not plunged into the Victoria housing market. Prior to my moving to Victoria from the Prairies a couple years ago, I owned a home in a bustling Prairie city. I was single at that time, making about the same money as I am now, and had no problem paying my mortgage.

The house I had bought was around $90 / square foot!

Fast forward to today. My wife and I would really love to purchase a home. We're tired of listening to our neighbours rap music, hearing mice scurry within the walls, and feeling like we can't have friends over for dinner because our space is a little tight. And we're not in a bad place! We live close to Cook Street Village and pay over $1100 / month.

We plan to use the maximum we can from the "Home Buyers Option". Our downpayment for a home should be acceptable. The problem lies in the future monthly payments. We're planning for children in the next year or two, so our income will be reduced to one and a bit. A mortgage for a townhouse in this city, with our downpayment, would be around $300 - 350k. Mortgage payments would be nearly $2000 a month. I'm puzzled as to how we could afford this with our situation. I don't think we can.

If you're a first time homeowner, perhaps with a young family, how did you do it?

Do you sleep at night with a mortgage that is larger that the GDP of some countries?

Am I going to have to either: a) get a 2nd job, b) sell my baseball card collection, c) win the lottery, or d) all of the above?

Maybe this is our new reality. Thanks.