My primary focus for the last year has been one thing – to save money in order to afford a down payment on a house. Trouble is, I’m probably one of the most impatient people on the planet. I want everything NOW!
I’ve done pretty well with this, being mellow, taking it day-by-day, establishing a plan, putting money away…being patient in general. My brother has always been a patient person and things have always come to him. I’m trying to use him as an example.
My plan, as of a month ago was pretty solid. I’ve got enough saved now for a down payment – the minimum 5% required for a first-time home owner. What remained was me to save enough for the closing costs – lawyers and such, as well as moving expenses and all the other things that come up when you buy a place. I was planning on signing another six-month lease beginning in September, and buying a place to move in in March of 2003.
The other glitches in this whole game is that because of my salary, I don’t earn enough to qualify for a mortgage because of my car payment. The good part of this is that my car lease comes to an end in October, so I figured I’d turn in the car and then be in a position to qualify for the mortgage. There are other issues abound like my job has been in reclassification hell for the last year, which, once it’s done will increase my salary by probably about $5000 to $7000, as well as provide retroactive pay for last school year…though I know that’ll be another fight, but my boss is on my side, so it’ll happen. Really, what matters here is that I’ve got a plan, it’s realistic and I think if everything ticks away the way I expect, it should all come together. A reasonable plan, I thought. You should know as well that the main reason for me to want to buy is that my psycho landlord raised my rent last year to $1000/month for a one-bedroom apartment. I’ve done the math and know that with my mortgage I would be paying about $800/month, including utilities…and be in my own place with payments going somewhere useful.
Now the good glitch that this entry is truly about. My brother claims that his patient, let things be and they’ll turn out for you is that when opportunity does knock, you have to be ready to pursue it full-force. I’ve never had such a loud knock on my door as came last week and am working to pursue the opportunity with anxiousness and fear.
The Housing Corporation branch of the Territorial Government here occasionally has assistance plans to promote home ownership. The big break my brother got years ago when the Nunavut Territory was formed was they were giving away – and I mean as a gift, no strings attached, $10,000 for new home owners. They actually were giving away I think $15,000 or more in Nunavut, and made it $10,000 in the Northwest Territories. My brother jumped on it and used that $10K for his house down payment.
This past week the Housing Corporation started a new initiative, primarily aimed at people in low-cost housing, or those on waiting lists to get into low-cost housing. Low cost housing, for those of you who don’t know are government-subsidized housing for those who fall below the poverty line. I probably could qualify, except that I’m too proud and I’m single, white, and male. I’m not their key focus.
I qualify fully for the new program – 5 years living in the Territories, the last of that in Yellowknife, I’m over 19, I don’t currently own a home, I earn less than $79,500/year and it goes on and on. I have to provide proof of income for the last three years as well as provide proof of current income, and, of course, I’m not their first priority, but I feel good about this. The only real catch to the program is that the money they’ll be giving out is in the form of a forgivable loan. I haven’t received confirmation yet, but I believe the term of the forgiveability (is that a word?) is 15 years. So, if I keep the house for 15 years, I don’t have to pay it back at all. I have no plans to leave Yellowknife. I’ve already lived her 25 years. This isn’t a great catch for me.
Alright…the deal. The maximum purchase price is $180,000. This isn’t a problem – I’m looking at $110,000 to $120,000 maximum. How much could I get? Get this…it’s a sliding scale, based presumably on salary level of 10% to 40%. That’s right, they’re willing to “give”/lend up to 40% of the purchase price towards the down payment. Because my salary is so far away from $79,500, it’s quite conceivable that I’ll qualify for the full 40%, and even if I don’t, the worst-case scenario of 10% would still be double the amount I was planning on putting down personally, plus of course I would get to keep the money I’ve saved for other house expenses. Are you seeing why I’m freaked out by this?
There is a possibility – best case scenario that I could buy a $120,000 home and immediately have 40% of that – $48,000 given to me for the down payment, leaving my mortgage to only be $72,000. Wow. As my brother says, you have to be ready for the opportunities when they knock and pursue them.
There are a few time restrictions as well. I have to have the purchase of the house complete within 60 days of being approved for this program, and my possession date be within 90 days of the closing day of the sale…so 5 months from the day I’m approved is the maximum time I have to complete the whole process.
This past week I contacted the Housing Corporation people for more information. They said that to apply for it, I must make an appointment for an interview, but that their offices are moving and they don’t want me to request an appointment until after the 20th of August. I’m going to start gathering my papers this week so I’m ready whenever my appointment is.
The other glitch of sorts is that I have to make a decision to renew the lease on my apartment by the end of August. If I don’t sign another six-month lease, my rent will go up to $1100/month and I’ll still have to give 2 months notice to move out because I’ve lived here for so long.
To add fun to the excitement, before I traveled to Ontario this summer, I drove around town looking at different neighbourhoods in the city to find a place that I’d LIKE to own and live that I figure is also in my price range. I found a nice little court that happens to have one of the places for sale – a private sale. The owners don’t seem in a huge rush to sell – all they have is a little orange & white hardware store-type sign stapled to the front of the place that says “House For Sale” and their phone number. Our city hall is quite advanced technologically, so I went to the city’s website last night and looked up the property to find out what they’ve valued it at for tax purposes, as well as see how much their taxes are and whether they’ve been paid this year. The city has it valued at $106,000 and their taxes have been paid for the year, so that wouldn’t be another expense I’d have to pay by the end of the year. I looked up my brother’s place and they have his place valued at about $10,000 less than he paid for it three years ago. This makes me think the sale price of the place I’m looking at it is likely in my $110,000 to $120,000 range.
There really is no cute story to this entry…it’s just dumping my thoughts on the page so I can stand back and look at them. If I qualify for the Housing Corporation program, what I’ll have to do is pay off the two months left in my car lease so that I can apply for a mortgage without the car lease payment being on the list of expenses and then go approach a real estate agent as well as call those people making the private sale. It freaks me out to consider that this could actually happen within a couple of months…simply because I’m listening to opportunity. I also don’t want to get my hopes up because I am quite comfortable with the plan I already have in place. The reality is that the Housing Corporation likely does HAVE to give away money and while I may not be at the top of their priority list, I likely would jump to the top pretty quickly if they don’t have any other active applications ahead of me.
I don’t want to judge those in low-cost subsidized housing, but my belief is that the majority of them likely don’t consider buying a place, mortgages and such long-term financial commitments. I know this sounds like I’m judging them as individuals; but really, I don’t think someone who has a few kids who can’t afford to pay their own rent thinks 15 years in advance. Sure, I acknowledge that they could be a family that has come upon some hard times, but I don’t think the majority of them are that pro-active with their thinking. What this means is that they likely won’t be applying for this program, increasing my chances of being approved.
Something else that entertains me with this process is that if it all does happen this quickly, I’m thinking that I won’t tell my parents about it. I’m certainly not going to tell them about the Housing Corporation program unless I qualify for it and am approved. I love them dearly, but I don’t want any more advice on this. I’ll be hiring a lawyer to do the paperwork for me and I know enough people who’ve bought houses in the last few years to find out the ups and downs and what to look out for. Ultimately, my parents can’t help me choose which house I want to buy. If I like it, and it passes the home inspection I’ll have done, and it’s in my price range, I’ll go for it. I think it would be a fun surprise to simply send my parents a change of address card along with some photos of the new place. That’s my kind of fun.
This home-buying thing will get transferred into the Obsessions section. I’m going to go out and take some photos of the place I’ve got my eye on – the outside only, of course – mainly for me to stare at, but also for you to see what $120,000 buys in Yellowknife. It’ll be a mobile home/trailer/manufactured home (whatever name you want to use for it) built in about 1984. It’s brown, has a deck (I want to be able to barbeque!!), and a small, sloping yard. It also looks as though nothing will be developed behind it with the way they city is adding new streets in the area. They’ve got a refrigerator on their deck, so that could possibly mean they’ve recently replaced theirs (or they’re hick types that has an extra fridge on the deck) and they’ve got bunches of kid play things scattered in the yard and on the deck.
As things go along in this process I’ll put updates in my rambles…good news or bad news. I’m staying cautiously optimistic. Oh…if I do qualify for the full 40% and it’s on a $120,000 home, my mortgage and utility payments will drop to about $700/month combined…$300/month less than what I’m paying now…plus my increase in salary – I’ll be doing much better financially. Patience and listening for opportunity. I’m learning.
I’ll have room for you to come and visit if this actually happens!