Hello PF, this is my first time posting here.
I would love to buy a house in the next 2 years, and I am actively saving for a downpayment. Houses in my area are pretty expensive, but I know you can get a solid fixer upper for 180 - 200 K, which is what I am aiming for. I would need probably ~30 K in reno costs, but I am willing to do them slowly, as long as the house is livable initially.
I've brought this up with my employer, (who I am friends with) and he is pretty adamant on not waiting to save up at least 30K and just getting a bank loan and using that as a downpayment. I feel hesitant about this and so I'd like some opinions.
I live with my SO, going on 3 years now. I make about 38 000 before taxes, but I am an independent contractor (in CAN) so. I currently have about 10 000 saved, but that includes tax money, so I'd estimate maybe 5000 - 6000 actually saved.
Now, an issue would be my SO. We are not married, and don't have a joint account. We split rent and food bills, but recently he has been having money issues. He needs a better paying job, and I have started to gently remind him to look for something. He makes 2000/month after taxes. I don't know his budget exactly, but it's something like this:
Car Insur: 200
Car Payment (until Jan 2016): 350
Taxes owing: ~ 200
That's basically bare minimum. He also owes me about $500, which I am in no hurry to get back. He NEEDS a better paying job, and we both know this.
My budget, generally:
car insur: ~90
Student loan: 500 (I've got 27 000 left or so)
407 charges: ~150
Spending: ~ 300
I have two CCs, one with about 300 and the other with about 200 right now. They both have an interest rate of 19%. I just went on a vacation to visit family - it's almost paid off. I use them for phone bills and such, and almost never carry a balance.
So! I think I would have 30 000 saved in 2 - 3 years, myself. If my SO can contribute in the (hopefully near) future, I think its possible to have a downpayment in 2 years. I can deal with that, but I don't want to wait longer if I can help it.
I have pretty good credit, last time I checked it was ~790. I have not spoken with a bank yet.
So, should I keep saving, risk a house price increase that may happen in my area (It is beginning to - people from Toronto are investing in the real estate here) or go talk to a bank and get a loan to buy in 1 year.
My budget isn't perfect, and I am working on improving it. I do also intend to find a better paying job (full time salaried position) in the future. Ideally I would leave my contractor status for 45 - 50 k /year.