- September 19, 2023
- Posted by: legaleseblogger
- Category: Related News
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Monthly Financial Overview and Concerns for a Family of 4 in Ottawa
Income: Our take-home pay is approximately $8600 per month, sometimes even more, providing us with a stable financial foundation.
Expenses:
1. Car Payment: We currently have one car payment of $375 per month, which is our only debt at the moment.
2. Mortgage Considerations: In order to purchase a property, we are looking to mortgage around $425,000 at an interest rate of 6.14%. This would result in a monthly mortgage payment of around $2755, which is a significant financial commitment.
3. Utility Costs: We estimate our monthly utility costs to be around $350, covering essential services such as electricity, water, and gas.
Property Taxes:
4. Per the listing, the property taxes for the prospective property are stated as $4705 per year. However, we have heard from friends in the neighborhood that these taxes might actually be around $6000 per year, translating to approximately $500 per month. This difference raises concerns about the accuracy of the listing and the potential for higher ongoing expenses.
AI Legalese Decoder Assistance:
Considering the substantial financial commitments we would be taking on, it becomes crucial to make informed decisions regarding the accuracy of the listing and the potential implications of the property taxes. Here, the AI Legalese Decoder can play a significant role in analyzing legal documents, such as the property listing or any associated contracts, to ensure clarity and understanding. By decoding complex legal language, the AI Legalese Decoder empowers us to fully comprehend any legal obligations or potential risks before making a significant financial decision. This tool can help us mitigate possible misunderstandings or deceptive practices, ultimately helping us navigate the situation more confidently.
Overall Assessment:
Given our family size and the financial factors at play, it is important to carefully evaluate the feasibility of this property purchase. The combination of a significant mortgage payment, potential discrepancies in property tax estimates, and other monthly expenses should be thoroughly examined and weighed against our current and future financial capabilities. Seeking advice from an expert, as well as utilizing tools like the AI Legalese Decoder, will be beneficial in making an informed decision and ensuring long-term financial stability.
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How AI Legalese Decoder Can Help with Complex Legal Documents
Introduction:
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Assisting in Legal Disputes:
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Conclusion:
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All the figures work out to about 4000$ a month. You are missing home insurance in that calculation and money for home maintenance.
Can you have the lifestyle you want with $4K a month left? You know the math adds up but only you can answer if that works for you.
Sounds reasonable as long as you maintain that income.
Sounds reasonable, but depends on ALL your other expenses.
Very affordable if youÔÇÖre at all handy and know how to budget.
ShouldnÔÇÖt even be remotely tight budget wise.
Good luck!
ItÔÇÖs doable for sure. Though, if your kids are in daycare or need a summer camp, itÔÇÖs going to suck for some months and might be cash flow negative for some months.
make sure you checked when the windows have been done, furnace, AC, and roof. Those are probably the biggest one time maintenance expense. Though, IÔÇÖm sure you can finance some of them if need be.
I know this is PFC and this sub is very cautious but come on. The numbers make sense and if the job is stable, easy to pull off.
Including car payment, your fixed cost s/b $4000/month at current interest rate. Leaving you $4600,- in cash flow for remainder of household needs and saving. Id say this is affordable
It can work, the real question is more tradeoffs. If you spend lots on vacations, hobbies, clothes, whatever, then consider if it all works.
Edit: also if that’s for both of you, then think about life goals. It might mean both of you have to work to afford your house. What does that do to other goals? What if someone is unemployed for a bit of maternity leave? Plan for an emergency fund.
When spending roughly 32% of take home pay on the mortgage – you should be fine.
Lenders will allow 32% of gross pay for Principal, Interest (the composition of your mortgage payment), Taxes and Heat (presuming it isn’t a condo).
And lenders will allow 42% of gross to service all debts (car in your case).
Both of those calculations would suit what you are thinking of without concern.
​
I would have your agent verify the taxes. Depending on what the assessed value is though it could be poised to move up depending on the purchase price of the home. So it is better to plan for the worst case and be happy if that never approaches.
Not enough info to determine without knowing age, savings, current home or not etc.
You should download your credit card statement and do a further break down.
You didnt state: car insurance, house insurance, groceries, projected maintenance, kids stuff, daycare, etc.
Sounds reasonable. Just have to know what other expenses you have and what is leftover after that.
Also perhaps a plan to pay down the mortgage sooner too
If you didnÔÇÖt have kids IÔÇÖd say this is comfortable but with 2 kids (assuming very young) and their expenses + travel and other miscellaneous you might be in a tight situation
Fellow Ottawan, and this sounds pretty reasonable. Just one things, IMHO: since your property isnÔÇÖt a condo, keeping a nominal provision for ÔÇ£rainy day repairsÔÇØ would be great to factor-in from the beginning, apart from Insurance, taxes and utility. Sure, you can always take HELOC but keeping aside some 200-300 CAD per month provide another buffer and a little peace of mind.
You can definitely afford this
What are your other goals in life? Any other plans?
Like others have said, you’ll be able to pay this, but I personally think it’s up there. So if you also want to set money aside for other projects, or want to travel or anything else, it could be tight.
If I were you, do your budget to truly see. The other thing you could do if you are not in a hurry to buy is to set that amount of money aside each month.
E.g. If your current living expenses are 2k and the home you are looking at is 4.5k, put an additional 2.5k aside each month and assess the impact on your lifestyle.
Your hh income is around $170-180k/yr? And youÔÇÖre looking at paying $40k/yr for housing?
I mean yah sure. You could probably get approved for far more. But there are way more variables before anyone can really say if itÔÇÖs a good idea.
Your age, dependants/their age, debt, etc
You didn’t mentiom childcare needs/costs – that could be a swing factor.
Our numbers are very similar to yours and we are doing fine. Some months our income is higher based on overtime but we are putting aside whatever we can.
Sounds doable, no? Like others said – think of other expenses and take lifestyle into consideration. The other thing I would factor in is job security and how stable you guys are if one loses the income? It is a thing you might want to think about in our times. I have few friends who bought near million dollar homes in last couple of years, then % rises and it is very likely that some of them will be foreclosed. Once that happens – your credit score is ruined and it becomes very unlikely to get another shot at owning property in Canada.
That being said, looks like for you guys it is quite doable. I would recommend getting it, since there are 4 of you, the mortgage is not insanely high (in todaysÔÇÖs reality), your household income is decent and expenses are low.
On the edge of being right but doable for sure.
We make about the same and $2700 is the max mortgage payment IÔÇÖm willing to take. We pay $1700 right now and it still feels tight sometimes with kids, but I think I could finagle the budget to accommodate $2700.
That said, we have really high transportation costs due to my husband commuting 3 hours a day.
Sounds reasonable and doable. Just be diligent about sticking to a budget.
Also, what kind of career field are you in? Curious to know
We have similar income, but an extra $1000 in car payments and are not tight on money, at all.
You can afford it, for sure. Personally, I would be hesitant unless you are 1) going to both be getting raises in the future or 2) are ok with limiting activities with your family until you make more money. Or be good at budgeting and save a bit each month.
Should be ok if no kids in daycare or university without resps’s. How much do you spend on gaz for the car per month.
I m currently paying 2500$ rental in barrhaven with a family of 4 and 6200$ in take home pay(my wife is not working currently,just immigrated). No debt though and we have about 350k$ in investment. Kids are 13 and 17. So even if you add city tax, car loan and house maintenance (i feel most of the rest is similar between us and you) the income difference more than make up for it
That’s a hell of a lot better than my position and I’m making it work. It’s definitely doable but you’ve gotta look at your lifestyle and see if you can make it work.
Seems realistic to me
Hydro, gas, property tax, utilities (garbage and water) property tax, internet expect to pay btwn $800 and $1000 beyond a mortgage
You’ll do great, don’t rush to spruce it up till you live in it for a bit.
You’ll make money on it down the rd hand over fist.
How old are your kids? Our family income is similar but we only have one kid and heÔÇÖs going to a daycare. If you donÔÇÖt have to spend a lot for childcare, IÔÇÖd say itÔÇÖs doable
I’m in a similar financial position. ~$9,300 monthly household income with a $2700 house payment (mortgage + tax). We have two old cars with no payments. 1 kid in daycare full time. After all the expenses and retirement/education savings, I basically have no disposable income. It’s “affordable”, but it would be nice to be able to blow money on fun stuff sometimes.
no… sounds very reasonable.. though man does that rate really suck lmao. we have a similar mortgage but it is 1000 less per month because we luckily refinanced last year.
You should be easily able to afford this. You won’t have tons of money left but this shouldn’t be a stretch
What do you do to make 8 grand a month but donÔÇÖt know basic math?
I’m in a similar situation financially wise and took on a little higher mortgage with my wife. We’re living very comfortably with a newborn.
YouÔÇÖre severely underestimating the costs of homeownership in a year.
How is Justin Trudeau still alive? Oh right, he’s got 4 mansions to hide out in
oshawa has one of the highest rates – itÔÇÖs probably in the $6k++ mark. but youÔÇÖll still have a few $k left at the end so spend wisely but YES you can afford it.
How does it compare to your current housing costs? How tight are you?
I assume you’re renting currently, keep in mind reno’s/repairs can be expensive AF.
Just curious, what kind of house is it? Condo? Single detached? What’s the sq.ft. and bed and bath number?
Pretty sure you can check the tax yourself in ottawa city website? I know i can check our area tax in our city website.
How about home insurance and is that rate fixed ?
The guidelines I like to use suggest that all fixed costs should add up to a maximum of 60% of take home pay.
Everything here seems to add up to about 50% of your take home. Can $860 cover the rest of your fixed costs (e.g. groceries, gas, and insurance)?
That’s not insane. Our take home pay in Edmonton is a tad more than yours and we are carrying two houses, but rent one out.. My new 2nd home mortgage is close to yours at high 5’s in interest. My property taxes are more than yours too. Just over 7K a year
Family of 4
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OP…stay renting for now.
Question:
1. is your job secure
2. any mat leave in the future
3. how old are kids
How much down payment are you putting into your house?
Do you have kids or over 60? You can defer the property taxes as long as you have 15 or 25% equity after purchase.