Aug 13, 2008

We're thinking of getting a house

We have been considering getting our own home. We pay $800 fortnightly on rent and if we get a mortgage we’d be paying around $1200 towards that. We can afford it but that would mean less towards savings. Still good right?

Since we’ve moved to NZ, we have lived in 3 different places where the third being the current one. In our current place, we have gotten a complaint from our downstairs neighbour on our barking dog. The first time was from a different tenant who moved out after 6 weeks because she just wanted a quite cave for herself and living below a family just didn’t work for her. With this new tenant, he works on shifts and so when he spends a work day at home, understandably he wants his peace and quiet. Like the other complaining tenant, he is also 50-something years old. Our small dog only barks when we leave in the morning, for maybe 20 minutes. We can’t do anything about that because dogs are pack animals and he sees 3 of us leaving him for the day 5 days a week. J has started considering giving him away because we might not really be the proper owners for him. I feel bad about that idea because he is a good dog. He doesn’t really bark when there are people around, even if they are strangers. He just does not want to be left alone. We really don’t know how to get rid of his separation anxiety.

Given this situation, we are further and further considering getting a mortgage. We don’t see the value of finding another place to rent. The cost of moving is not cheap. We have a good amount of furniture and belongings. Moving to another place to rent is just not pretty now that we have a kid. At this stage we can afford up to $330,000 and we can’t really find houses on such values within the city. I prefer to live on flat grounds but since Wellington is a hilly area, there are plenty of houses with fantastic views on the hills. Flat areas with plenty of sun are well above $350K. If we consider suburbs farther from CBD, we could get ourselves a good house within our budget. The cost of petrol would just kill us so we might as well stick to the city limits. But who knows, we might change our minds.

We are tired of dealing with complaints about our dog. I know that is not really a perfect reason to just dive into debt but since we’re paying that much on rent anyway, we’d rather own the place he would bark in. I’m pretty confident that we can afford the payments. Despite not having enough to stash into savings, at least we’d be gaining equity on our home. We our putting 4% towards retirement at this time and we’re earning well between ourselves. I can see ourselves affording more in the next 5 years. Currently our combined gross annual income is above $120K prior to this year’s increases. The baby will have 20 hours free early childhood education when he turns 3. That would free up around $200+/fortnight on day care by then. We can use that to put towards our mortgage. We don’t have enough savings despite earning that much. I know it’s just embarrassing. The next few months will be more relaxed as we pay off our hire purchases (in the next 6 weeks!) and when we put our backdated pays towards the car loan.

Now buying a house is a process we’re not keen on expediting. I'm sure there are costs and fees when buying a property. It's really a big decision to make, but come to think of it so is renting. Having a child does change things. What once used to be an easy decision to make is now a factor that consumes me for days. We've just been looking for properties to check. So far we've found cheaper properties in Porirua and in the Hutt areas. Porirua is about 20-30 minutes of drive and that's not bad but as Wellington is small our world adjusted accordingly. So, in my mind, Porirua is far! Sigh.

So what do you think of us buying a house?

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