On the drive back to Alberta yesterday, Jordan and I were talking about our house fund goal.
I had orginally put $35,000 as our goal for a down payment - I just sort of decided, with out putting to much energy into it. Just to get us started. We have our eye on my aunts home, which she stated she would want about $250,000.
With that in mind, we have decied to set up 4 tiered goals. The first goal would be reaching 5% of 250,000 - then 10%, then 15%, and finally 20%. Having a down payment of 20% is the ultimate goal, so we can avoid Mortage Loan Insurance
From what I can gather from the CMHC, we would pay insuance equivilant to 2.75% of our mortagage loan ($250,000 less the down payment) for insurance - approximately $6,875 if we had less then 20% down.
So, our tiered goals are shown in the following little picture. Teir one, has our current monthly contributiones ($150, every week). In this graph, I'm assuming that about once every year we will increase our contributons by $25/each a month. This may or may not happened - depending on circumsatances, but I'm going to role with it for now.
(I have updated our house fund goal tracking bar to reflect our Tier One Goal)
Good idea! This way you can achieve mini goals quickly and celebrate progress.
ReplyDeleteMini goals are the way to go. If you make a goal that's too big it seems like it takes forever to reach it and is a bit self-defeating.
ReplyDeleteI like that you guys are making sure you don't pay the CMHC fees and are still looking to get the house in about 5 years, that's awesome!
Hopefully interest rates will go up within the timeline of your 4 tiers. =)
ReplyDeleteI'd hate to think of getting 1.35% for the next 4.84 years. That would be just HORRIBLE!
@ Mom - that was sort of our line of thinking too!
ReplyDelete@ Jamie - I think I had quite a few goals that were beyond reach within a reasonable time line - and your right, defn. self-defeating! I'm hoping this will help some!
@Dr. Faith - You're right it would be pretty awful - right now the funds are just in an ING account, when we started the interest was around 3% or more. When we reach the first $10,000, we might be in a better place to look at higher interest accounts - defn. something to look out for!
If I could go back in time and be smarter, I would a) put more money down at the start, b) put aside $ each month for the inevitable repairs that come your way and c) pay extra, even if it just $100, a month on the principal.
ReplyDeleteYou are far wiser where you are than I was at your age.
@ Jolie, thanks!!
ReplyDeleteOnce we deplete the house fund (for it's intended use); my plan is to continue contributing to it (perhaps at 300/month instead of 650-800/month). That would be used for taxes/repairs that sort of thing.